There are two major trends in China’s auto market in 2021. One is the high penetration rate of new energy vehicles, and the other is the increase in second-hand car transactions. The China Automobile Dealers Association predicts that the volume of used car transactions in 2021 will exceed 16 million units, exceeding the level of 2019, with an increase of more than 12%. Last month, the transfer procedures for second-hand cars nationwide began to break through geographical restrictions, and they were handled across provinces.
This further releases the vitality of the used car market, and new energy vehicles will also become beneficiaries of the wave. But at the same time, this industry background has extended a question: What is the market for new energy vehicles that have begun to increase in the new car market in the second-hand market?
In order to answer this doubt, I recently went to the used car market in Huaxiang in Beijing several times.
Huaxiang is Beijing’s largest used car trading market. In its heyday around 2010, Huaxiang accounted for over 90% of Beijing’s second-hand car transaction volume, and its inventory exceeded 10,000. Even in the mobile Internet era, fewer people watch cars offline, but the Huaxiang second-hand car market has a very intuitive reference for the entire second-hand car market.
The answer I got was beyond what I expected at the beginning. I didn’t see enough new energy vehicles in Huaxiang. Even the penetration rate of new energy vehicles in first-tier cities such as Beijing and Shanghai has exceeded 15%. But in Huaxiang, except for a few anchors who talked about cars on the live broadcast, nothing can remind me that this is 2021. Yes, looking around, there are almost no green cards, and this is still the world of fuel vehicles.
During my first visit, I only saw two Audi e-trons, one Mercedes-Benz EQC, two Weilai EC6s, two Tesla Model Xs, and several BYD and BAIC after walking through the entire market. New energy vehicles have not sold as many balance cars and scooters used for transportation.
In the luxury second-hand car showroom at the gate of Huaxiang Market, the glory of petrol cars is still continuing. There are even tiger heads from the last century, but there is no Tesla. The boss Li Lin and I joked that there are no electric cars in the exhibition hall for fear of burning the sports car on the side. Except for old customers who need to find specific new energy models, Li Lin generally does not accept second-hand trams.
There are many reasons why Li Lin refuses to accept new energy second-hand cars. For example, he can’t sell them to occupy the booth, and the guy who prepares the cars doesn’t understand trams. From the perspective of revenue alone, now is not the time for new energy used cars. Due to the shortage of chips in the automobile industry this year, some of last year’s fuel vehicles can still be sold at Li Lin’s store at the fare of the new car.
“Isn’t it better to make money from a fuel car?” he said.
Li Lin’s attitude is similar to that of most second-hand car dealers in Huaxiang. Another car dealer told me that if you want to find new energy second-hand cars, you should go to the second-hand car market in the south. The winter in Beijing is too cold, so fewer people buy trams.
He revealed that the people who come to Huaxiang to buy second-hand trams are generally those who got the green card but don’t have enough money to buy a new car, or those who buy online car-hailing. “If you just want to buy a car and occupy a license plate, you can buy Wuling Hongguang. If you want to buy a better car, people will not look at second-hand cars. There will be fewer people who really need second-hand trams.” He said. Therefore, new energy vehicles that few people care about belong to the most troublesome category of vehicles.
New energy vehicles, which are advancing in the new car market by leaps and bounds, seem to have encountered the opposite situation in the second-hand car market. Everyone knows that new energy vehicles represent the future, but new energy vehicles have not yet gained a foothold in the highly competitive second-hand car market.
“Tesla’s frequent price cuts have made me lose money”
There are only two types of cars in Huaxiang, the ones that can make money and the ones that lose money. In the eyes of Huaxiang used car dealer Zou Shuai, most new energy vehicles are “losing money.”
For most small and medium-sized second-hand car dealers, second-hand cars are an industry that occupies too much capital. Funds require high-frequency turnover. You must sell the cars in your hands as quickly as possible to make a profit through the price difference. Reduce capital loss. The most fearful thing is that the car is brought over and cannot be sold.
Zou Shuai’s knowledge of new energy used cars comes from years of trading experience. Among the customers contacted by Zhang Shuai, car buyers are most concerned about whether the vehicle will continue to depreciate. “Currently, second-hand trams are directly 60% off in the first year, and may be 40% off in the second year,” he said.
Whenever someone who came to buy a car asked if Zou Shuai would still pay after driving for two or three years, Zou Shuai’s answer was no. “If you buy a second-hand tram, plan to drive it until it is scrapped,” he told me.
The rapid depreciation rate of new energy vehicles is the main reason why some consumers do not choose trams, which also makes Zou Shuai have to increase the circulation speed of second-hand trams. “I can’t hold it, it may be sold for 80,000 yuan when it is closed, and the market may change again in half a month,” he said. And every time after receiving a tram that is not easy to sell, Zou Shuai can only watch the price of the car fall from his own heart price all the way to the closing price, or even lower.
Zou Shuai has handled a lot of cars that were sold at a loss, and every time he sold a car at a loss, he would never take another car of that model. In Zou Shuai’s “blacklist”, the Tesla Model S left the deepest impression on him.
In the first half of this year, according to acquaintances, Zou Shuai spent 520,000 to receive a 25,000km Model S from the private car owner. After the car arrived, he parked in Zou Shuai’s parking space for more than two months, and finally had no choice. , Zhang Shuai sold the car for 460,000.
In Zou Shuai’s memory, Model S is the first batch of new energy second-hand vehicles to enter Huaxiang. At that time, a new Model S car sold for more than one million, which stood out from the crowd of new energy vehicles with a range of less than 300 kilometers. Although it is the consensus of the Huaxiang market that new energy second-hand cars are not easy to sell, Zou Shuai at that time believed that Tesla was an imported car at any rate, a big brand, and it would sell better than ordinary electric cars.
However, after the localization of Tesla, the owners who bought the Model S at a high price were regarded as “leeks” by some netizens. At least Zou Shuai did not expect that Tesla would be “so cheap” after localization.
Wang Kai also had some trouble with Tesla second-hand cars. In April of this year, Wang Kai received a Model Y, and the number of kilometers is not high in good condition. But because Tesla experienced the “brake door” incident in April, Wang Kai’s Model Y has never been sold at the desired price. Now this Tesla is still parked in front of Wang Kai’s shop and turned into his scooter.
“This car was originally intended to sell for more than 600,000 yuan, but now it only sells for 550,000 yuan. After the brakes happened, the market will be the same. Everyone who comes will ask if there is any problem with the brakes.” Wang Kai pointed to another Tesla. Model X said.
But what is worse than the brake door incident is that Tesla frequently cut prices. Since the localization in 2020, Tesla has frequently cut prices in the Chinese market. After the price cuts of new cars, second-hand Teslas collected by Wang Kai and other car dealers have also depreciated in disguise. “People who come to inquire will say that Tesla did not lower the price two days ago. Why didn’t you lower the price? When I collected the car, the price of the new car hadn’t been lowered. As a result, I could only suffer a loss,” said Wang Kai.
Frequent price cuts for new cars make the original pricing rules established by car dealers no longer applicable. The low level of understanding of new energy vehicles has also discouraged some car dealers. “I don’t understand the tram. I can’t make a lot of money. It will be more troublesome in case the sold car has an accident,” said a car dealer.
The cruising range of pure electric vehicles has increased rapidly in the past two years, from 400-500 kilometers to 700-800 kilometers. This also makes cars with low mileage in the hands of car dealers unable to be favored by consumers.
Since the batteries of new energy vehicles cannot be tested by conventional means, consumers are also easily deceived when buying second-hand electric vehicles. “You have never counted the battery life if you haven’t fully charged it. You can’t tell if some people adjust the odometer and then sell it.” Wang Kai said.
After losing money on Tesla, Wang Kai has become more cautious about the recycling of electric used cars. Currently, Wang Kai only accepts quasi-new cars with a kilometer of less than 5,000 kilometers, and does not accept electric cars except for brands such as BBA, Tesla and Wei Xiaoli. In addition, when receiving a second-hand car from an individual owner, Wang Kai will choose the method of consignment. When the owner has a clear purchase intention, Wang Kai will contact the seller to pay the full amount and then go through the transfer process.
In Zhang Shuai’s description, some cunning car dealers would choose to delay the transfer of ownership, find a first-hand seller to lower the price again after discovering that the trolley could not be sold to grab profits.
Currently, Wang Kai still has two imported Audi e-tron cars in his hands. According to Wang Kai’s description, these two cars were “advertising cars” from automakers, and the automakers sold the cars to Wang Kai after they finished filming the commercials with these two cars. “According to the transfer process, these two cars are considered first-hand cars. The original price is 760,000. Now if you sincerely want 420,000 to give you,” Wang Kai said to me.
Because the transaction time of electric second-hand cars is long and the source of customers is scarce, Wang Kai will try to talk about the low price when closing the car. This is the only way he can think of to reduce the risk. But after changing the trading strategy, Wang Kai received fewer and fewer electric vehicles.
“How much is autonomous driving worth?”
Because of the low level of understanding of the structure of new energy vehicles, Huaxiang car dealers have no clear rules on the pricing of second-hand trams. The price of a car depends on how much the car dealer wants to make and the mood of the car dealer.
The three-year value retention rate of most traditional fuel vehicles is usually 60%-70%, and some explosive models are even more expensive than new vehicles. But for second-hand electric vehicles with the same kilometers, the value retention rate is generally below 50%.
When visiting the market, I have encountered situations where some car dealers quoted prices on some models that exceeded objective expectations. For example, for a BYD Qin EV that drove 50,000 kilometers, the car dealer gave a price of 56,000 yuan, while a 2017 JAC electric car with a cruising range of only 175 kilometers, the car dealer gave 30,000 yuan. Offer.
“Why sell it for 30,000, because I want to sell it at this price. I charged more than 20,000 for this car. Do you want it or not,” the car dealer told me. My colleague’s first feeling when he saw the car was that the car should be lying in the car cemetery, not here.
Later, I informed another car dealer about the condition of the Jianghuai car and asked if the price was charged, but the car dealer told me, “This is broken, I don’t want to bid 10,000.”
In terms of marketing skills, the words of car dealers are also difficult to convince me. When introducing Tesla, the car dealer’s words are mostly “big brands”, “with ease of worry”, etc. When it comes to Weilai and other new car manufacturers, the car dealer’s words will give you a Chinese car. Has succeeded in cornering and overtaking leading the world’s illusion, “To support domestic production, domestic electric vehicles are now much better than foreign ones”, and stepped on Tesla and other brands, and told me most government departments and houses in a leaky tone. The community does not allow Tesla to enter.
In their eyes, the intelligence promoted by car companies is not worth mentioning. As long as the car is a tram, it carries the original sin. When I asked car dealers about the autopilot functions and vehicle technology interaction functions of car dealers such as Weilai and Tesla, the dealers all said, “I haven’t tried it” and “automatic driving is prone to accidents. That stuff is worth a few dollars.”
Yes, car dealers don’t care about the autopilot function, they care more about the warranty period, whether they will be sent or not, such as free charging and replacement services.
Zhang Shuai told me that one of the main reasons why car dealers in the market ignore the auto-driving function of vehicles is that the customer group who buys second-hand trams does not have a demand for auto-driving functions. The attractiveness of autonomous driving to customers is not even as high as free maintenance and other fringe benefits. And when receiving the car, the car dealer has no research on the automatic driving function, and cannot evaluate the automatic driving function of the vehicle, and can only simply evaluate the experience of use.
Therefore, car dealers in Huaxiang will automatically ignore the automatic driving functions of some trams when collecting and selling cars. Among the remaining factors, the vehicle’s cruising range and driving range have become the most important reference factors for car dealers’ valuation.
When a car dealer introduced me to a tram, he also told me that “the mileage of the vehicle is not important, but the year is important, because the longer the battery time, the more exhaustion.” He made a common sense error, or he wanted to lie to me. The degree of battery exhaustion is related to the number of charging and discharging, so the driving range is the main reference standard for the life of the power battery.
According to Wang Kai, the current inspection process for new energy vehicles by second-hand car dealers is basically the same as that for fuel vehicles, except for the observation of paint, vehicle interior inspection and simple test drive. In the most critical battery loss detection link, car dealers can only rely on their feelings. “You can even open the hood of a petrol car to have a look, and you can’t see the battery of the tram, and there is no easy-to-use instrument to test the battery,” said Wang Kai.
Lack of the ability to judge the performance of new energy vehicles and judgment standards. Car dealers like Wang Kai generally do not recycle second-hand trams in the hands of individual car owners, but choose to trade with manufacturers or 4S shops. And how much money a car dealer can make from a second-hand tram is entirely dependent on the price offered by the 4S shop.
But in Zou Shuai’s view, car dealers like Wang Kai have not found the real wealth code for second-hand electric vehicles. Because he has a few green cards in his hand, Zou Shuai has been in the business of second-hand electric vehicles a few years ago. He divided second-hand electric vehicles into three categories. Teslas with high prices are considered high-end vehicles; online ride-hailing drivers such as BAIC and BYD prefer one category; and mini-electric vehicles such as Wuling Mini are one category.
Among them, models such as Wuling mini have the fastest circulation. Because the basic needs of customers who buy this type of car only account for the license plate, they do not have too many requirements on the performance of the vehicle, and even require “the more broken the cheaper the better.” However, due to the low transaction price of such models, car dealers can only earn hard money to protect their capital.
Trams with new car prices ranging from 100,000 to 150,000 such as BAIC and BYD are the most difficult to sell. The car-buying crowd for this type of car is basically online car-hailing drivers, and the crowd of online car-hailing drivers is relatively small, and cannot fill the entire market.
As for high-end electric vehicles such as Tesla, whether they are selling well or not depends on factors such as the new car market and market sentiment. Although it is not easy to sell, the advantage of having a Tesla in the store is that it can attract more users during the live broadcast. “Every time we talk about Tesla, there are two groups of people, one is cursing the brakes, and the other is asking me to show the door of Model X. There are several rounds a day,” said Zou Shuai, every time we broadcast Tesla It’s all lively, but few people ask for quotations.
Zou Shuai’s last trick is to not accept cars with lithium iron phosphate batteries. Because “lithium iron phosphate is not good in winter, and the recycling price is the same as selling scrap iron.”
“I will be a tram until the petrol truck is not allowed on the road”
In Huaxiang, where the transaction frequency and the number of transactions are extremely high, the true value of a used car will be verified and tapped many times, and finally sold at an equilibrium price that meets the interests of car dealers, sellers and buyers.
When the second-hand electric cars appeared, this highly market-oriented mechanism was also exerting its influence, pushing every car dealer to make a faithful choice-stay away from second-hand electric cars as much as possible. Even Zhang Shuai, who thinks he knows more about electric vehicles, chose to place three electric vehicles in the corner with the cheapest parking space.
The second-hand car market like Huaxiang, as an important part of the vehicle circulation link, has not fully embraced new energy vehicles. But another objective reality is that as new energy vehicles are killing all quarters in the field of new cars, the problem of vehicle replacement will become more and more serious.
Whether the interests of these owners of new energy vehicles can be guaranteed, the industry has not yet given an answer.
An observer of the second-hand car industry told Tiger Sniff that more than half of the current online sources of second-hand cars are from 4S stores, so 4S stores are the main sales force of second-hand trams.
Since the beginning of this year, new car-making forces such as Weilai have announced the establishment of related second-hand car businesses. Previously, NIO announced that it plans to invest 3 billion yuan to establish its used car trading system, and subsequently launched a second-hand car business called NIO Certified-this includes providing users with full-process services such as vehicle testing, evaluation, acquisition and sales. According to the process, car owners can sell the car to Weilai, and consumers can buy second-hand cars from Weilai.
And Li Bin, the founder of Weilai Automobile, has also publicly stated that Weilai will not cut prices casually because it wants to protect the interests of old car owners. This seems to be a positive signal that the interests of consumers who buy new energy and new cars will be protected by 4S stores. In addition to NIO, auto companies such as Great Wall Oula and Weimar have also launched official value-preserving repurchase strategies to protect the price of their branded second-hand electric vehicles. But from the industry’s point of view, the more intentions of the car companies’ move is still to sell more new cars.
During this visit to Huaxiang, it is not difficult for us to find that even though some new energy car companies have announced their entry into the used car field, such measures have not completely improved the embarrassing position of electric cars in the used car market.
The root of all this lies in the depreciation of old products caused by the rapid iteration of new energy vehicle products and the short life of new energy vehicles caused by the bottleneck of power battery technology.
Modifying used car trading rules cannot change these objective realities.
During this visit, second-hand car dealer Li Lin asked me a question: “Why are new energy vehicles difficult to charge and battery depreciation is not better than last year, but this year’s new energy vehicles and new cars can sell so well?”
“New energy vehicles are the future, everyone knows, do you really plan to do new energy second-hand vehicles business?” I asked rhetorically. To my question, Li Lin’s answer is to wait until the petrol truck can no longer be on the road before doing the tram business.
He believes that the entire market is not yet ready to receive so many second-hand trams that will face replacement in the next few years. In his estimation, the petrol truck could live another thirty years, by which time he would have retired long ago.