Summary of Key Points
The sales figures for new car manufacturers in May have been released, and ZeroRun Automotive has become the first brand in this sector to exceed 80,000 units sold in a single month with 81,600 units, solidifying its position as the leader with several strong competitors following. However, most of the other leading new brands are stuck around the 30,000-unit mark (with none exceeding 40,000 units), facing what could be called the “30,000-unit curse.” Some brands, such as NIO and Xpeng, are poised to break through this barrier, while others like Li Auto have seen a year-on-year decline in sales. New energy brands spawned by traditional automakers are growing rapidly but remain smaller in scale. The overall decline in the car market, coupled with the entry of new brands, has intensified competition.
Detailed Analysis
#### 1. ZeroRun’s Leadership Established, Breaking New Sales Records
ZeroRun delivered 81,569 units in May, a year-on-year increase of 81% and a month-on-month increase of 14.3%, setting another record. This is not only a milestone for ZeroRun but also represents a significant breakthrough for the new car manufacturer sector as the previous monthly sales peak for these brands was around 50,000 to 60,000 units. The ability to reach 80,000 units indicates that ZeroRun has successfully reduced the fixed costs per vehicle (such as research and development and factory equipment) due to its cost-effective strategy. This is likely because its main models are priced competitively, allowing for faster volume sales. It also shows that its supply chain and production capacity have kept up with the increased demand. ZeroRun now holds a clear lead over other new brands, and no one seems to be able to challenge its position as the leader for now.
#### 2. The Second Tier Struggles with the “30,000-unit Curse”
The news states that “except for ZeroRun, none of the other new brands have sold more than 40,000 units in a month,” with seven of the top ten brands (including NIO, Jikr, and WM Motor) hovering around the 30,000-unit range. Why is this considered a “curse”? When monthly sales fall below 30,000 units, it becomes extremely difficult to absorb the increased costs associated with rising raw material prices (such as for batteries and chips). For example, if a car manufacturer sells 20,000 units per month, the cost per unit is 1,000 yuan; if they sell 40,000 units, the cost per unit drops to 500 yuan. Without higher sales, costs cannot be reduced, leading to compressed profits or even losses. Therefore, reaching 30,000 units is a critical threshold; only by surpassing this mark can companies hope to further reduce costs and improve efficiency.
#### 3. Divergent Performance Among Leading Brands
Even within the 30,000-unit range, there are significant differences among brands:
- NIO: Its multi-brand strategy is effective, with total sales of 37,700 units (second in the market). Its sub-brands, such as Lido, have seen a month-on-month increase of 124.8%, and the more affordable model, Firefly, sold 5,663 units, indicating that NIO is targeting different market segments. NIO’s goal for the second quarter is 110,000 to 115,000 units, and it hopes to exceed 40,000 units in June.
- Jikr: Both sales and prices have increased, with 34,400 units sold, and its flagship model accounting for nearly 50% of total sales. This suggests that Jikr’s premium models (such as the 009 MPV) are popular, demonstrating the brand’s ability to command higher prices.
- Li Auto: Sales have decreased by 18.4% year-on-year and continued to decline month-on-month for two consecutive months. The new L9 and i6 models have not contributed significantly to sales growth, indicating that product adjustments are needed. Li Auto’s target for the second quarter is 95,000 to 100,000 units, but it is expected to sell around 30,000 units in June.
- Xpeng: Sales increased by 3.73% month-on-month, with a target of 100,000 to 106,000 units for the second quarter. While its performance is decent, it has not returned to the levels of the same period last year.
#### 4. New Energy Brands from Traditional Automakers: Fast Growth but Limited Scale
New energy brands launched by traditional automakers, such as Dongfeng Yipai (24,800 units), BAIC Arcfox (17,900 units), Lantu (13,000 units), and Zhiji (10,000 units), are growing rapidly, but their sales volumes are still much smaller compared to the leading new brands. This is because traditional automakers have financial and supply chain advantages; however, their transition to new energy may not be as fast or user-friendly as that of pure new car manufacturers. For example, these brands lack brand recognition, and their products have not become highly sought after by consumers, so they are still trailing behind the leaders.
#### 5. Intensifying Competition in a Declining Market
Data from the China Association of Automobile Manufacturers shows that retail sales of passenger vehicles decreased by 24% year-on-year from May 1 to 24, and new energy vehicle sales fell by 11%. Despite this, new brands are continuing to enter the market:
- FAW Besturn has upgraded its “Yueyi” model to a standalone new energy brand.
- Seres has partnered with ByteDance to launch “Saidou Technology,” targeting a younger, more sporty audience.
- ZeroRun plans to release a second brand by the end of this year or next year.
This indicates that although the market is competitive, there are still opportunities, especially in niche segments (such as young consumers and families). However, for existing brands, the pressure to survive is increasing. They must either expand their scale significantly or differentiate their products to avoid being eliminated in the increasingly fierce competition. Those without core technologies and sufficient scale may be at a disadvantage.
In summary, May’s sales data reflect a shift in the new car manufacturing sector from a period of diverse growth to one where only the strongest brands are thriving. ZeroRun has established a significant lead, while other leading brands are struggling to break through the 30,000-unit barrier. New energy brands from traditional automakers are catching up, but the competition is becoming more intense. For consumers, there are more choices available, but for car manufacturers, the bar to survive is getting higher: they must either expand their scale or offer unique products to stand out.