New Energy Cars Reshape Tire Market

Traditional fuel vehicles have developed a relatively stable tire size system over their long history. Small tires, thanks to their cost advantages and wide compatibility, once held a prominent position in the replacement market. However, the emergence of new energy vehicles (NEVs) has disrupted this balance.

Their battery packs significantly increase vehicle weight, while the powerful torque output by their electric motors places higher demands on tire load capacity and durability.

To address these changes, larger wheels have become a common choice for NEVs. This trend has directly reshaped the tire size landscape in the replacement market, with the rise of 16-inch tires being particularly significant, quickly becoming the dominant sales force in the replacement market.

The 16-inch tire's dominance stems from its ability to effectively fit most mainstream NEV models and meet the basic performance requirements of these vehicles. Furthermore, the strong market demand for this size has attracted numerous tire companies, resulting in ample supply.

However, this influx of companies has also created significant challenges: increasingly homogenized products. Many companies underinvest in product R&D, design, and performance enhancements, resulting in 16-inch tires on the market that appear similar in appearance, materials, and performance. In this situation, price has become the most direct means of competition among companies.

Price wars have intensified, and the market has entered a brutal "red ocean" phase. Tire companies' profit margins have been squeezed to razor-thin margins, and many small and medium-sized enterprises are facing survival pressures.

Similar to the 16-inch tire market, the 17-inch tire market has also followed suit, mired in a price war. 17-inch tires are primarily suitable for some compact new energy vehicles and upgraded models of traditional fuel vehicles, reaching a broad market audience.

Because the technical requirements and production processes for this size tire are similar to those of 16-inch tires, it's relatively easy for companies to enter the market, further intensifying market competition. Consumers are highly sensitive to price fluctuations when choosing 17-inch tires, as the differences between brands are relatively small.

Once a brand lowers its price, consumers flock to that brand, making brand switching relatively low. This puts companies in a passive position in pricing strategies. To maintain market share, they are forced to engage in price competition, further squeezing their profit margins and creating a vicious cycle.

However, when the focus shifts to the 18-inch and larger tire market, the competitive logic has quietly shifted. The 18-inch tire market has become a clear watershed in the tire replacement market, marking a shift from price competition at the low end to value competition at the mid- to high-end.

Tires 18 inches and larger are primarily suitable for mid- to high-end new energy vehicles and luxury gasoline-powered vehicles. These vehicles prioritize performance, comfort, and safety, and their owners possess distinct consumer characteristics. When choosing tires, these drivers no longer solely consider price; instead, they prioritize performance, including key indicators such as wet and dry handling, wear resistance, and high-speed stability.

On dry roads, a tire's grip and handling directly impact the driving experience and safety. On slippery roads, good drainage and anti-skid properties can effectively reduce the risk of traffic accidents. Meanwhile, a tire's wear resistance index is crucial to its service life, while high-speed stability is crucial for vehicle safety at highway speeds.

In addition to performance, brand heritage and user reputation are also important factors for car owners when choosing tires. Mid- to high-end car owners tend to have a high degree of brand awareness and loyalty, preferring tire brands with a long history, a strong market reputation, and strong technical R&D capabilities. These brands have accumulated extensive technical experience and positive user reviews over their long development, providing consumers with more reliable products and high-quality services, thus laying the foundation for brand premium.

While price remains an important factor influencing consumer purchasing decisions, its weight has significantly decreased compared to product quality. Consumers are more willing to pay a higher price for tires with excellent performance and a positive brand image, seeking a better user experience and quality assurance.

In the 18-inch and larger tire market, the focus of competition among tire companies is no longer simply on price, but rather on product R&D innovation, technological upgrades, and brand building. Companies have increased their investment in research and development, and continuously launched new products with advanced technology and excellent performance to meet the demand of mid- to high-end car owners for high-quality tires.