Reporter: Yuhan Zhao
“September and October have always been peak months for automotive sales. This year, local vehicle exchange subsidy policies have further fueled the market. However, some new automakers’ models are struggling with production capacity amid skyrocketing demand, leading to delayed deliveries that have caused complaints from consumers who risk losing out on these subsidies.
At the same time, order scalpers, who have been almost non-existent since the price wars in the new energy sector, have resurfaced. Some popular models’ orders are being sold online for inflated prices ranging from $500 to $1,000.
In the heated new energy market, the competition has expanded beyond price, technology, and model offerings to include production capacity, which is putting a strain on new entrants in the industry.
Production Capacity Issues
Consumers Face ‘Delivery Anxiety’
“I’m really worried about not getting my car in time to take advantage of this year’s exchange subsidies,” said Mr. Wang, a resident of Beijing who locked in an order just last month.
On September 25, he secured an order for the new MONA M03 model from Xiaopeng Motors, which he was supposed to pick up in November. However, he has been informed that there might now be a delay. He reached out to the sales team multiple times, only to receive conflicting information; first, they assured him there would be no delay, but later said delivery might be pushed back to early December. “I’m anxious that I won’t get the car this year, and I’ll miss the subsidy,” Mr. Wang expressed.
Mr. Wang’s situation isn’t isolated. Many other owners waiting for the M03 have taken to social media to voice their frustrations over delivery delays. Some have even been informed they won’t receive their vehicles at all this year, clearly missing out on local exchange subsidies.
In response, a representative from Xiaopeng confirmed to our reporter that some orders are indeed facing delays, acknowledging that “Order demand for MONA has exceeded expectations, and this has impacted our delivery capabilities.” The company has reportedly already expanded production three times to meet demand and is offering compensation in the form of points redeemable in their store, although many customers feel that these points, worth between $2,000 and $3,000, pale in comparison to the subsidies being offered.
The pressure from subsidies has not only affected Xiaopeng but also other newcomers like Xiaomi, which recently launched its first model to great success, and NIO, which is seeing strong orders for its new sub-brand. Sales staff in some regions from these brands have expressed that current orders may not meet this year’s subsidy timelines.
Risks of Buying Scalped Orders
The delivery delays that threaten subsidies have led to a reactivation of order scalpers in the new energy market.
A few years back, rising material costs prompted numerous electric vehicle brands to raise prices, leading to scalpers hoarding orders to sell later at a profit. However, as prices eased and competition heated up, many of these scalpers suffered losses and exited the market.
Now, a few models’ production difficulties have led to the re-emergence of scalpers. Searches on second-hand platforms reveal offers for earlier delivery orders for popular models like the MONA M03 and Xiaomi SU7, some fetching prices between $500 and $1,000. One scalper I spoke with mentioned they have an order for the M03 with a delivery date at the end of November, asking for $500. Although purchasing a scalped order means paying an extra fee, some consumers are willing to do so just to secure the subsidy. “Paying $500 to get an order and still enjoy a $2,200 subsidy is worth it,” said Mr. Liu, another M03 buyer who has confirmed he won’t get his vehicle in time for this year’s subsidy and is now looking at scalpers for a quicker solution.
However, buying from scalpers presents risks, as companies like Xiaomi require proof of a familial relationship for order transfers. Additionally, there have been reports of scams involving scalpers. Xiaomi’s sales staff recommend that consumers refrain from trusting scalpers and suggest placing orders through official channels only.
Intense Competition
Market Penetration Must Consider Production Capacity
Tesla, NIO, Li Auto… every new player has faced production challenges at the start. Traditional automakers were slow to adapt, which allowed new companies to carve out their niche. However, the landscape has shifted, with many traditional automakers deeply pivoting toward electric vehicles, making the production capacity challenges for new brands even more pressing.
Unlike newer brands facing strain, traditional automakers’ new electric models seem to be navigating delivery timelines with more ease. For example, Geely’s new brand Zeekr has a delivery timeline of just 2 to 4 weeks for its newly launched 7X model, significantly outpacing the 10+ week timelines faced by some newcomers. Meanwhile, Changan’s new brand Deep Blue has recently introduced a new model priced at $1,600, directly competing with the already popular $1,400 M03. Deep Blue’s CEO has even promised that if any delays cause consumers to miss their exchange subsidies, the company will cover the full amount.
In the new energy era, many new brands have faced delayed deliveries. According to industry expert Wang Meng, new energy companies often “jump the gun” by announcing new models even before they’re officially available, increasing the likelihood of delivery setbacks. It’s essential for these companies to have appropriate compensation strategies in place for consumers affected by these delays to build trust. Simultaneously, new brands should carefully consider their production capabilities while rapidly iterating new models to capture market share.
