The Development Of New Energy Vehicles Entered A Critical Period: The National Federation Of Industry And Commerce Proposed Stabilizing The Subsidy Expectation.

The development of China's new energy vehicle industry has become the focus of attention in 2020. In addition to the motion proposals put forward by the representatives of the automotive industry, the all China Federation of industry and Commerce and the Central Committee of the Kuomintang also put forward proposals to promote the development of China's new energy vehicle industry.

In order to promote the development of new energy vehicles in China, the National Federation of industry and Commerce has proposed 4 proposals to stabilize the new energy subsidy expectation, to postpone the exemption from the purchase tax preferential policy, to strengthen the construction of infrastructure for charging and exchanging electricity, and to promote the implementation of the policy of double integration. In the light of the short board problems encountered in the development of new energy vehicles in China, the Central Committee of the people's Republic of China put forward some suggestions on the development of the chip for speeding up the development of new energy vehicles.

"The impact of subsidised retreat, the new energy vehicle market in China began to decline from the second half of last year, and has not been improved. The impact of the epidemic has not recovered in the first 4 months of this year, and the development of the industry is highly concerned." On May 21st, Cui Dongshu, Secretary General of the National Federation of Hong Kong Federation of trade unions, told reporters on twenty-first Century economic report.

In 2019, China's new energy vehicle production and marketing appeared to vigorously promote the first negative growth in ten years, and is still lingering low. As more foreign enterprises accelerate the launch of new energy vehicle products in China, China's local enterprises will face greater challenges. At present, it is the key period for China's new energy automobile industry to transition from the subsidy era to the market era. Whether the local car companies can maintain the new energy advantage and take the opportunity to break through is a common problem faced by China's automobile industry.

Critical period of Industrial Development

With the support of the government, after ten years of development, China has developed into the world's largest producer of new energy vehicles.

However, the sharp decline of new energy vehicle subsidies in 2019 has undoubtedly disrupted the pace of many enterprises, and sales of many electric vehicle manufacturers have declined significantly. In 2020, when the impact of the epidemic was overturned, the cash flow of some car companies became tense and slowed down the pace of product development and market promotion.

In the short term, the impact of the subsidy decline is directly reflected in the total cost increase, and the total cost pressure is shared by vehicle manufacturers, suppliers, distributors and consumers. For vehicle manufacturing enterprises, if the sales price of the vehicle is unchanged after the subsidy goes down, the profit will decrease and the deficit will expand. If the price rises, the market demand will decrease and the inventory will increase.

At the same time, the pure electric vehicle market is driven by policy driven to market driven. Subsidised subsidies will drive the industry to focus on reshuffling. Coupled with the gradual penetration of joint venture products, the window period of independent brands is gradually shortened.

We need to be vigilant that China's local brands are weakening in the new energy market. From the market share, the data of the Federation show that the share of new energy vehicles in the first quarter was 72.5%, and the market share fell below 90% for the first time in three years.

Prior to that, Xu Haidong, deputy chief engineer of the China Automotive Industry Association, predicted that in twenty-first Century, if we did not include Tesla, the sales volume of new energy vehicles in China is expected to be around 1 million this year. In 2018 and 2019, China's new energy vehicle production and sales exceeded 1 million 200 thousand vehicles. The market size of local brands will decline in a certain range.

It is worth mentioning that the Ministry of finance, the Ministry of industry, the Ministry of science and technology, and the four ministries and commissions of the national development and Reform Commission jointly issued the new standard of subsidies for new energy vehicles in 2020, with a 10% decline. And it is clear that by 2022, the subsidy of new energy vehicles will be stable until the exit, and the new energy vehicle free tax policy will be extended to 2022. To a certain extent, this will alleviate the market pressure faced by local car companies.

In the next stage of the development of new energy vehicle industry, the driving force of market development will change.

The National Federation of industry and Commerce proposes to strengthen the construction of charging and exchanging infrastructure and provide support in the use of links, so as to attract more consumers to buy new energy vehicles. In addition, the National Federation of industry and commerce also suggests accelerating the research and formulation of the "vehicle electricity separation" management standard and technical specification, and improving the management and control measures of power exchange mode in terms of industry management, product announcement management and technical standards.

At present, the main players of the technology of "vehicle electric separation" in China are Wei Lai and Beiqi new energy. Wei Lai regards power conversion technology as one of the core competitiveness to enhance user experience, and the power exchange technology of Beiqi new energy is mainly used in public areas such as taxis, network and vehicle.

In the process of gradual withdrawal of the subsidy, the double integral policy undertakes the role of promoting the development of new energy vehicle industry. According to the double integral policy, vehicle enterprises need to produce more new energy vehicles in order to meet the requirements of double integrals, so as to enhance the enthusiasm of automobile enterprises in developing new energy vehicles.

However, at present, due to the low requirement of the double integral policy for the integration of new energy vehicles, enterprises are more than enough to deduct the negative integral from the average fuel consumption of the associated enterprises.

The National Federation of industry and Commerce recommends setting up the "average fuel consumption integral trading index" and "new energy vehicle integral trading index", similar to the Shanghai and Shenzhen securities trading index, and the information on the highest and lowest daily transactions and volume of transactions, and timely release them to the public. The implementation of double integral for all vehicle enterprises and the information on penalty information of the double integral failing to meet the requirements of the previous year should be publicized to the public, and supervision by public opinion should be introduced. We should further refine the economic penalties for the car enterprises with double integral failing to meet the standards so as to prompt the car companies to plan ahead the production capacity structure and control the rhythm of the integral trading, and guide the car enterprises to strive for the goal of energy saving and emission reduction.

From breeding market to technological breakthrough

China's new energy vehicle market has gone through the stage of market cultivation, and with the increasing number of players in China's new energy market, the industry has come to shuffle. The new topic of China's new energy vehicle companies will be how to break through in competition with Tesla, Volkswagen, TOYOTA and other international giants.

"In terms of products, technology and design, there is still a clear gap between China's new energy vehicles and foreign countries." Cui Dongshu said that making up the technical gap is the key to the next development of China's new energy vehicle.

It is worth affirming that with the continuous improvement of our new energy vehicle's R & D and innovation capabilities, we have made a series of breakthroughs in core technologies such as batteries, motors and electronic control. However, the vehicle gauge chip is monopolized by foreign manufacturers. The domestic automobile front end sampling chip is still a blank in product development or market application. It is the most obvious short board in the development of new energy vehicle industry in China, which brings many hidden dangers and problems.

The Central Committee of the Kuomintang has made 4 suggestions in the proposal to speed up the development of vehicle regulation chips and promote the development of new energy vehicles and energy storage: to focus on supporting the technology roadmap of the chip R & D projects, to incorporate the vehicle gauge chip technology breakthroughs into the key research tasks of the national key R & D plan for the new energy vehicle special plan; to guide related enterprises to strengthen application support; and to strengthen innovation ability and people. Only the training of the team; and the protection of intellectual property rights.

"Making chips requires a lot of input. It depends on the ability of the enterprise itself, and also the pain point of the industry. It also needs to consider the cost." In May 21st, a car industry insider told the economic report reporters in twenty-first Century that the vehicle regulation chip had high technical barriers, market barriers and capital barriers. It not only needed the combination of industry, University and research, but also needed to unite among different enterprises.

In fact, car companies have begun to increase the layout of chip related businesses. BYD released IGBT4.0 technology in 2019, and now its IGBT technology has been adapted to all vehicle models.

With the development of new energy vehicle market, the demand of vehicle gauge chip will increase greatly. In the future, it will generate huge commercial value, and it is also a new breakthrough for China's new energy vehicle technology breakthrough.