New energy vehicle market is soaring Chinese car companies are welcoming opportunities to surpass in all aspects

Beijing, 24 Dec (Xinhua) -- On 24 December, China Securities News published an article entitled "New Energy Vehicle Market Advances In Triumph, Chinese Auto Enterprises Welcome Opportunities to Surpass in All Directions." The article said that the thick green branches are a little red, and the moving spring color does not need to be much. In 2021, in the "cold winter" of the automobile market, the soaring new energy vehicle market has become a warm "touch of spring". Explosive growth in production and marketing, rapid increase in penetration, transformation to demand-driven... China's new energy vehicle sales have been the best in the world for 6 consecutive years, while bringing profound changes to China's auto industry, it has rewritten the global automotive industry pattern.

(Photo caption) Information photo, issued by Xinhua News Agency

Looking forward to the future, the new energy automobile industry, which still has great development potential, has not only become an important starting point for promoting the "double carbon" strategy, but also helped Chinese enterprises to seize a new highland of global industrial competition. The strong supply chain guarantee capability will escort the long-term development of China's new energy vehicle market.

(Subtitle) The strong driving force for the development of the automobile market

In 2021, the new energy vehicle market showed an explosive growth momentum. According to data released by the China Association of Automobile Manufacturers, from January to November, automobile production and sales reached 23.172 million units and 23.489 million units, respectively, an increase of 3.5% and 4.5% year-on-year. In contrast, the production and sales of new energy vehicles reached 3.023 million units and 2.99 million units, respectively, an increase of 1.7 times year-on-year.

In 2021, the penetration rate of new energy vehicles will increase significantly, and the pace of replacing oil vehicles will be significantly accelerated. According to the data, as of November, the penetration rate of new energy vehicles reached 12.7%, which doubled from the level of 5.4% at the beginning of the year.

The rapid growth of the new energy vehicle market in 2021 has a solid foundation. With the improvement of performance and the decline of costs, the new energy vehicle market is changing from policy-driven to demand-driven.

Unlike the high-end models in the European and American markets, China's new energy vehicle market presents a "dumbbell" pattern. Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, told the China Securities News reporter that the market strategy of new energy vehicle manufacturers has evolved into two paths: one is the high-end path of Tesla, BYD, Weilai, Xiaopeng and other brands; the other is the A00-class model launched by brands represented by Wuling Hongguang miniEV and Euler black cat white cat, which spread sales in the low-end market.

Cui Dongshu, secretary general of the Association, believes that according to the sales data, the policy orientation of the new energy vehicle market in 2021 is compared with the market orientation, and the incremental proportion of market orientation is increasing. Consumers' acceptance of new energy vehicle products has gradually increased, and the consumer market has shown a trend of expansion from first-tier cities to second- and third-tier cities. At present, the overall cost of new energy vehicles is still higher than that of traditional fuel vehicles, but the price reduction potential is larger. On the one hand, the continuous increase in battery production capacity can reduce the purchase price of batteries; on the other hand, the corresponding products can be customized according to different use scenarios to change the existing structure of the large and complete, which is expected to reduce the cost of the vehicle.

After the rapid growth of the new energy vehicle market in 2021, the future growth potential is still huge. Wang Chuanfu, chairman and president of BYD Group, said that the electric vehicle products provided by Chinese car companies have surpassed traditional fuel vehicles in terms of performance and cost of use. This year, the sales volume of new energy vehicles in the Chinese market is expected to exceed 3.3 million units. By the end of next year, the penetration rate of new energy vehicles in China will exceed 35%.

The rapid growth of the new energy vehicle market in 2021 is achieved in the context of "lack of cores", and as the "lack of cores" eases, the suppressed demand is expected to be fully released. Wanlian Securities expects that with the gradual increase in the supply of fab automotive chips and the continuous operation of new plants, the production and sales of new energy vehicles will achieve the second phase of rapid growth from 2022 to 2023.

Rewriting the global automotive industry landscape

The rapid growth of the new energy vehicle market in 2021 not only profoundly changes China's auto industry, but also shakes the traditional pattern of the global auto industry.

Judging from the market value ranking of global vehicle listed companies in the past 20 years, the top ten have been occupied by traditional fuel vehicle companies for many years, especially Toyota Motor, which has been the first place in the market value of global car companies from 2001 to 2019. In recent years, electric vehicle companies led by Tesla have accelerated their rise. In 2017, Tesla squeezed into the top ten of the global car company market value for the first time, and in 2020, it surpassed Toyota, and the market value jumped to the first place in the world.

In the process of the sudden rise of new energy vehicle companies, Chinese car companies have taken the lead. According to the statistics of Composite Market Cap, among the top 20 listed companies in the world, 7 of the listed car companies are Chinese car brands (BYD, Great Wall, Weilai, Xiaopeng, SAIC, Ideal, Geely), 5 in the United States, 3 in Germany, 2 in Japan, and 1 each in Italy, South Korea and the Netherlands.

Behind the rapid rise of Chinese car companies is the continuous enhancement of the global competitiveness of China's new energy automobile industry. Data show that since 2015, China's new energy vehicle sales have ranked first in the world for 6 consecutive years.

CITIC Securities believes that after the electrification of automobiles, China has achieved the "three electrics" system of "lane change and overtaking". Different from traditional fuel vehicles, the "new three major parts" of electric vehicles have become three electric systems - batteries, motors and electronic controls. In the process of automobile electrification, China is at the forefront of the world. A large number of outstanding enterprises have been cultivated in the core components of new energy vehicles such as three electric systems, automotive electronics and intelligence, and are gradually accelerating the realization of global support. Taking Tesla as an example, in addition to the traditional body, exterior, interior, chassis, etc., there are a large number of Chinese companies in the suppliers of three-electric systems, automotive electronics and intelligent accessories for some of its models (such as the domestic Model 3). Under the wave of mutual integration of vehicle electrification and intelligence, intelligent electric vehicles have become a new track, providing Chinese car companies with the development opportunity of "lane change and overtaking". After the realization of the electrification of automobiles, the backward technology of Chinese car companies in the era of fuel vehicles has gradually been rewritten. At present, in the field of new energy vehicles, Chinese car companies are leading overseas car companies in terms of understanding and application of electrification and intelligence, and can better meet the needs of customers for new products, new technologies and new functions of automobiles.

Strengthen supply chain guarantee capabilities

In 2021, the rapid growth of China's new energy vehicle market is inseparable from the strong support of China's new energy vehicle industry chain. Looking back at 2021, from the upstream lithium ore lithium salt to the midstream battery materials and power batteries, the strong expansion of the entire new energy vehicle industry chain resonates with the explosive growth of the new energy vehicle market.

In the global competition in the new energy automobile industry, Chinese companies are particularly prominent in the field of power batteries with the highest value of electric vehicles. According to SNE data, from January to October 2021, among the top 10 companies with installed power batteries in the world, there are 6 Chinese companies on the list, with a total market share of 47.1%, and CATL has occupied the world's first seat for four consecutive years.

At the same time, Chinese enterprises continue to expand their leading position in the global new energy vehicle industry chain through technological upgrading and capacity expansion. For example, in 2021, CATL plans to raise 45 billion yuan for the Fuding Era Lithium-ion Battery Production Base Project, Guangdong Ruiqing Era Lithium-ion Battery Production Project Phase I, Jiangsu Times Power and Energy Storage Lithium-ion Battery R&D and Production Project (Phase IV), Ningde Jiaocheng Era Lithium-ion Power Battery Production Base Project, and part of the funds are used for the research and development of advanced technologies such as sodium-ion batteries.

China's new energy vehicle industry chain maintains a leading edge in the world, escorting the further growth of China's new energy vehicle market and meeting the huge demand of the global new energy vehicle market.

"The carriages and horses did not move, and the grain and grass went first." Ping An Securities believes that the automobile industry is in a critical period of electrification and intelligent transformation, and the fullness of "grain and grass" reserves is one of the key factors affecting the development speed of car companies in the important window period.

China Securities News reporter combed and found that since 2021, more than 30 lithium battery industry A-share companies have issued fixed increase plans, and the fundraising is mainly used to expand production capacity, new technology research and development, etc., involving lithium battery cathode, negative electrode, electrolyte and other links. (End)