Is it inevitable to hurt old car owner because of rapid iteration of new energy products?

Recently, because Zeekr upgraded and replaced their smart driving models 001 and 007 within six months, the prices of both versions were reduced by 20,000 to 30,000 yuan. This has hurt car owners who already bought these vehicles as they feel betrayed by Zeekr. 

In the age of 'software-defined cars', new car models are being released at an increasingly rapid pace, and it's not uncommon for owners of older vehicles to feel like their rights are being violated when a new car hits the market. For instance, Xpeng G3 recently underwent a surprise makeover, and similarly, Li ONE received an unexpected upgrade, both causing public outcry. 

The Car Quality Network, a top platform in China for gathering info on faulty car products and consumer quality complaints, there are also loads of gripes about trampling on consumer rights. According to stats from July 20th, 2024 to August 19th, 2024, over the span of one month on the Car Quality Network, there were a whopping total of 13,463 legit complaints from car owners. Among them were a solid 1,194 beefs related to violations of consumer rights and a major surge in grievances due to issues like model changes. 

It's tough for owners of old cars to accept that their newly bought 'new cars' eventually turn into 'old cars'. How companies address the concerns of existing car owners puts their responsiveness to the test. There are also differences between car manufacturers and consumers when it comes to whether automobiles should be seen as fast-moving consumer goods. With new players entering the market with self-made cars, the concept of automotive electrification has been continuously reinforced. The industry is now concerned about avoiding betraying old car owners through product iterations. 

Facelift without message

Previously, when the Xpeng G3 got a facelift, its range went up significantly to a whopping 520km compared to the previous model's measly 365km. On top of that, the new G3 comes with an XPILOT 2.5 autonomous driving assistance system and has had some major chassis improvements. The release of the new G3 came just six months after the old model, but it not only added more cool features but also dropped in price. Many car owners even got their hands on these cars only two or three months before the launch of the new model. Alongside all these fancy changes, there have been cases where car owners took legal action at Xpeng headquarters due to unhappy customers. 

Similarly, Ideal, as another emerging player in the market, went through a similar situation. In early September 2022, Li Auto officially announced that they would stop producing the Li ONE from October onwards and offered a price reduction of 20,000 yuan. They will be introducing their new car, the Li L8, as a replacement. Unfortunately for those who recently bought their cars, not only will they miss out on the 20,000 yuan discount but also their brand-new cars will become outdated. 

According to what we know, the main reason why customers are unhappy is because new models were unexpectedly launched. Some customers have said that they asked multiple times about any upcoming releases before buying and were told by salespeople that there wouldn't be any new cars introduced this year. As a result, they quickly got their hands on their vehicles. From a customer's point of view, these misleading statements from salespeople made them feel deceived and taken advantage of. 

Combined with the recent drop of a brand-new ride by Zeekr, right after shutting down rumors about launching a fresh model, they swiftly rolled out an upgraded version. On the Car Quality website, there's been a surge in complaints regarding Zeekr 001/007 lately. Numerous owners of the 2024 models have griped that Zeekr kept their plans to unveil a new car under wraps, which has seriously infringed upon consumer rights and called for compensation. 

Some customers have expressed their disappointment, saying, 'I pre-ordered the Zeekr 007 car for March 2024 and was told I would get it in April. But just three months after buying it, they released a new model with better technology and a lower price. This let down loyal customers.' The customer also mentioned that similar issues happened with other car brands before, but those companies compensated existing owners. However, when he left his message, he hadn't seen any reasonable solution from this company yet. 'Cars are important consumer products. If we were informed earlier about the upcoming new model, consumers could choose to wait or buy the previous version directly. However, they didn't honestly disclose this information and used deceptive sales tactics. 

Currently, many car owners in various regions are demanding compensation and even staging protests at Zeekr's headquarters. As of now, Zeekr's proposed solution is to give a 10,000yuan discount on the final payment for those who pre-ordered their first Zeekr 001, Zeekr 001 FR, or Zeekr 007 models before September 30th, 2024 (inclusive), regardless of whether they get rid of their old cars. However, this solution falls far short of meeting the demands of some consumers. 

The rhythm has been disrupted

Speaking objectively, the redesign and upgrade of automobile products, especially new energy vehicles, are happening fast. As Zeekr pointed out: In China's rapidly developing era of new energy vehicles, continuous technological progress and iteration are essential choices for all participating brands. 

In the old days of traditional fuel vehicles, there used to be a big upgrade every three years and a whole new generation changes every five years, with even longer replacement cycles lasting 6-8 years. But now, the replacement cycle for new cars has significantly shortened, and it's become the norm to have an annual upgrade. Whenever there is a new energy vehicle generation change, accusations often pop up about brands betraying their loyal customers. 

Zhang Yue, the Senior VP of Car Research, thinks that the car industry is currently in a cutthroat price war just to survive. Car manufacturers have to constantly up their game and stay ahead to keep sales going and avoid getting kicked out of the market. When it comes to new energy vehicles, they often face fresh competition within about six months, so rapid updates are unavoidable. From a fiercely competitive product standpoint, updating every six months makes perfect sense. 

In the car industry, going electric is still being developed at a fast pace. This means constant updates to both software and hardware are needed to make sure customers have the best experience possible. Nowadays, some people even judge if a car is cutting-edge and easy to use based on its fancy chips, strong computing power, and smart systems. 

However, from the perspective of channels and consumers, the changes in the model replacement system and price system can get pretty chaotic, and their impact on brands is often more noticeable than just sales volume. The automakers only care about selling as many cars as possible and dump all the pressure onto channels, which ends up having a bigger long-term effect rather than just short-term sales. Channels become hesitant to sell, while consumers turn to them for protection of their rights. These factors create a sort of 'centrifugal' effect among all three parties, inevitably affecting the long-term survival of enterprises, said Zhang Yue.

In the world of electric and smart cars, it's become a thing for outsiders to see them being produced at lightning speed. However, when it comes to pricing, cars are still seen as big-ticket items. So, it's hard for consumers to accept that their newly bought vehicles quickly become 'old models'. In this cutthroat era of competition, constantly updating products can leave existing car owners feeling dissatisfied and hurt the brand's reputation, which may discourage potential new customers," explained an industry sales executive. "Besides deciding between redesigning or lowering prices, automobile manufacturers should have backup plans ready to keep current vehicle owners happy while avoiding situations where both current and prospective buyers end up feeling unsatisfied. 

Translator：Wei Xiong