Galaxy E5 is here, will Geely New Energy have a hit?

tech | 2024-03-28

The pricing strategy for the Galaxy E5's market launch is quite intriguing. From what I've seen in my social media circle, the starting price advertised is 109,800 yuan, which initially gives the impression that this model is bound to become a hit. After all, it's a direct reduction of 13,000 yuan compared to the pre-sale price that started at 123,000 yuan. Does this mean that Geely, despite claiming they are "not competing," is actually still in the game?

However, upon closer examination of the specifications, you'll find that Geely is indeed "not competing"; they've simply played a "trick" in their pricing—Geely's official guidance price for the Galaxy E5 ranges from 112,800 yuan to 148,800 yuan, but with a limited-time discount of 3,000 yuan, thus the starting price becomes 109,800 yuan to 145,800 yuan.

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Moreover, the previously advertised starting price of 123,000 yuan was actually for the second-lowest trim level—the 440km Exploration version is priced exactly at 122,800 yuan—so in reality, it's only a reduction of 3,000 yuan compared to the previous pre-sale price, which is within expectations.

If you're looking for a longer driving range, the Galaxy E5 also offers a version with a 60 kWh battery and a range of 530 kilometers, with a starting price of 125,800 yuan. This price is clearly targeted at the best-selling model in the entire segment, the Galaxy E5's direct competitor—the BYD Yuan PLUS. It's just that the Galaxy E5 has a slight price advantage.From a communication standpoint, the 13.58 million yuan 520KM Exploration+ version is expected to be the main selling product, and Geely has also stated that this version has the largest number of pre-orders. However, we actually believe that the Galaxy E5 is more likely to sell in larger quantities at the 11.98 million yuan version. The reason is simple: even though this is the next-to-lowest configuration, Geely has included a 16-speaker Flyme Sound system worth 8,800 yuan and upgraded the L2 level of assisted driving, which is a tangible upgrade for ordinary consumers.

From the perspective of a family car, the extra 10,000 yuan for the Exploration version in exchange for a better comfort experience is unquestionable. The premise of being comfortable and easy to drive is "comfort," and having more configurations also makes driving more worry-free.

Moreover, due to the configuration upgrade of the next-to-lowest version, the entry-level version of the Galaxy E5, although cheaper in price, is not the best in terms of cost-performance ratio. The entry-level version is mainly used to lower the selling price. For example, in terms of configuration, the entry-level version does not have an upgraded sound system and L2 assisted driving, no sunroof, and no seat heating or ventilation, and it even lacks front radar. The exterior color is limited to black, white, and gray, focusing mainly on the smart experience with Flyme Auto.

However, it must also be acknowledged that if Geely is willing to produce the Galaxy E5 Launch Edition at 10.98 million yuan, its sales should not be too bad. For most buyers of pure electric SUVs in the 100,000 yuan price range, their core needs are urban commuting and low operating costs. Therefore, a 440KM range is sufficient for urban use. Moreover, this range is unlikely to be used for intercity commuting, so the absence of L2 assisted driving is not crucial. The 10,000 yuan saved compared to the next-to-lowest configuration can cover insurance and charging costs.As for the higher-end versions priced at 130,000 to 140,000 yuan, we believe they actually exceed the competitive range of the Galaxy E5. The main reason is that currently, models like the Volkswagen ID.4, ID.3, and Buick E5 have already reached the 140,000 yuan price point. Additionally, the demand for compact SUVs is more inclined towards PHEVs (Plug-in Hybrid Electric Vehicles), so there is limited opportunity for entry-level compact SUVs like the Galaxy E5 to significantly increase in price.

Overall, in terms of product strength, the Galaxy E5 itself does not have any particularly outstanding features. Every selling point aligns with the demands of this price range, but it does not exceed consumer expectations. Compared to its competitor, the Yuan PLUS, the Galaxy E5 does not have an overwhelming advantage, as both the vehicle dimensions and motor performance are quite comparable.

However, we do not doubt that the Galaxy E5 may quickly become a product within the Geely system that achieves monthly sales of over 10,000 units, thereby propelling Geely's monthly sales to a new level.

The reason is that with the Galaxy E5 entering the 100,000 to 120,000 yuan pure electric SUV market, Geely offers consumers another choice. Previously, when there was only one leading product in the market, the overall market capacity was limited—consumers who did not prefer the Yuan PLUS might have directly turned to plug-in hybrid products. Now, by providing a new alternative to the Yuan PLUS, consumers may find it easier to make a choice after comparison, thus expanding the market space for entry-level compact pure electric SUVs.On the other hand, the emergence of the Galaxy E5 is essentially to fill the market demand that Geely had previously in the entry-level SUVs such as the Bin Yue and Boyue COOL, which are priced around 100,000 yuan.

Originally, Geely had a very strong product matrix in the 100,000 yuan entry-level market, with models like Bin Yue and Boyue having the capability to sell over ten thousand units per month in the early years. However, with the increase in the penetration rate of new energy vehicles, Geely was not quick enough to transform in the entry-level market, lacking sufficient new energy products, which also led to the sales of pure fuel SUVs like Bin Yue and Boyue COOL no longer being able to support Geely's market share in the 100,000-120,000 yuan segment. Now, the launch of the Galaxy E5 is to regain Geely's competitiveness in this price range, starting with a strong debut, and then further strengthening the advantages of the entire entry-level market, allowing Geely's monthly sales to reach a new level.