Text/Lu Shiming
Edit/Gale
A few days ago, the Ministry of Industry and Information Technology and other four departments jointly issued a notice of 30% reduction in new energy state subsidies, and new energy vehicles that are licensed after December 31, 2023 will no longer be given state subsidies.
It is understood that under the new energy subsidy policy in 2022, the subsidy for pure electric passenger cars with a cruising range of 300 (inclusive) to 400 kilometers is 0.91 million yuan; the subsidy for electric vehicles with a cruising range greater than 400 kilometers (inclusive) is 12,600 yuan. Plug-in hybrid passenger cars (including range extenders) with a cruising range of more than 50 kilometers are subsidized by 0.48 million yuan, and the price before subsidy must be less than 300,000 yuan (including 300,000 yuan).
This means that 2022 will be the last year of the implementation of the new energy subsidy policy.
Affected by this news, many car companies began to officially announce price increases, including Tesla, Volkswagen, GAC Aian, Nezha Automobile and SAIC Extraordinary Automobile and many other car companies.
In fact, the decline in subsidies for new energy vehicles did not start in 2021, and has been in a state of decline in the past few years.
As a policy guide, subsidies have played a key role in the growth of an emerging market. However, as the market matures, the subsidy decline will not hinder the development of the market, but will improve the product quality of the track players, which is a good thing for the entire market and a good thing for consumers.
Subsidies have long been doomed
Looking back at the development speed of China's auto market in recent years, it is not an exaggeration to describe it as "rapid progress". The main reason behind this is due to the rise of China's new energy automobile industry.
In order to develop the rapid development of new energy vehicles, in 2010, the four departments issued new energy subsidy policies, and a total of 3 batches of 25 cities were selected to carry out demonstration and promotion pilots of energy-saving and new energy vehicles. By 2013, the subsidy policy entered the promotion and application stage, and then in 2016, the subsidy policy entered the comprehensive promotion stage.
Under the huge policy dividend, many enterprises have joined the new energy vehicle track in the early stage of the development of new energy vehicles. Over the years, new energy vehicle companies can be described as blossoming everywhere and increasingly.
According to Tianyancha data, as of September 2021, there are 198 new energy vehicle manufacturing enterprises in China, of which 150 are registered between 2018 and 2020. If the business scope is expanded to the relevant industrial chain, as of September this year, there are more than 332,000 new energy vehicle related enterprises registered in China.
According to the statistics of Composites Market Cap, among the top 20 listed vehicle companies in the world, 7 of the listed car companies are Chinese car brands, namely BYD, Great Wall, Weilai, Xiaopeng, SAIC, Ideal and Geely.
In fact, as early as 2016, when it entered the comprehensive promotion stage, the Ministry of Finance and other four ministries and commissions jointly issued the "Notice on the Financial Support Policy for the Promotion and Application of New Energy Vehicles from 2016 to 2020", which has clearly pointed out that the implementation of subsidies for new energy vehicles in 2016-2020 is a slope-off mechanism, and new energy vehicles may enter a subsidy-free era after 2020.
However, with the epidemic and other reasons, the subsidy for new energy vehicles has been extended for another two years. Of course, the slope reduction mechanism still exists, and the subsidy standards from 2020 to 2022 will decline by 10%, 20% and 30% respectively on the basis of the previous year, that is, this year's subsidy standards for new energy vehicles will be reduced by 30% on the basis of 2021.
Looking back at the 12-year subsidy process, many car companies have also taken a crooked road.
Many enterprises build cars across industries, not really want to build cars, but through convenient support policies and false publicity, they go to rich subsidies.
For example, on September 8, 2016, the Ministry of Finance exposed five new energy vehicle manufacturers, including Suzhou Jimxi Bus Manufacturing Co., Ltd., with the intention of defrauding the state of financial subsidies of more than 1 billion yuan. In addition, special inspections were conducted on 93 enterprises, and a total of 9.2 billion yuan of subsidies were found to have been fraudulently obtained.
【Seized Jimsey New Energy Vehicle】
Now, as subsidies continue to decline, after the tide recedes, these naked swimming "fake car companies" are also eliminated.
Of course, under the subsidy dividend, in addition to bydir and other strong traditional car companies, the new energy vehicle market has also given birth to many powerful new car companies, the most representative is "Wei Xiaoli".
In 2021, the delivery volume of "Wei Xiaoli" was 91,429 units, 98,155 units, and 90,491 units, respectively, becoming the only three new car manufacturers with an annual sales volume of more than 90,000 vehicles in 2021. In addition to "Wei Xiaoli", the growth of new car-making forces such as Nezha Automobile, Weima Automobile, and Zero-run Automobile is also very obvious.
From a macro point of view, on the one hand, the new energy policy subsidies are to be able to cultivate new energy vehicle companies that have launched a global brand, on the other hand, they want to achieve self-sufficiency in resources, even if there is no subsidy, car companies and capital are also willing to continuously invest in new energy vehicles.
From the current situation of the domestic new energy vehicle market, the market has entered a positive cycle and has the ability to make itself hematopoietic, and the purpose of these two aspects has been achieved.
After all, subsidies are government-guided policies, but they are definitely not the means used by car manufacturers to make profits, just like a child who has just learned to walk, he needs someone to help him walk, but one day he will let go, and the road behind him will have to go by himself.
The competition of car companies will usher in a new inflection point
When the subsidy standard declines, it means that most of the models launched by car companies will face the squeeze of thousands of yuan in price space.
And this will further revise the logic of new energy vehicle consumption, screen out more excellent independent car brands, and then focus on cultivation, and reshuffle" the new energy automobile industry.
At present, among the more popular pure electric vehicles on the market, most of the mini-vehicles such as Hongguang MINIEV and Xiao Ant are not within the scope of new energy subsidies, so the price will not be adjusted too much.
A number of new car-making brands, including Xiaopeng, Weilai, and Ideal, as well as high-end models such as Tesla Model 3 and Model Y. After the price of their products exceeds the 300,000 level, the purchase power of consumers is still extremely strong, so the difference of thousands of yuan generated by the decline of subsidies will not be too much valued by consumers and these companies.
For example, Weilai and Xiaopeng Automobile have announced that they will complete the payment within the specified time period, and the subsidy difference will be borne by the manufacturer. What's more, most consumers will choose to buy a car in this way of loans, and the entire subsidy is not much impact.
As for the traditional large car companies, in the case of BYD, its own market sales are very good, and it has become the champion of China's new energy passenger car sales for several consecutive months, and its huge volume itself has diluted the cost for the enterprise.
And at present, BYD has core technologies in the fields of batteries, motors, etc., and is the car company with the most patents among all new energy vehicle companies, and the subsidy decline will not have a great impact on it, and even BYD will most likely subsidize consumers out of its own pocket.
However, because the subsidy is only for pure electric passenger cars priced below 300,000 yuan, some low-end entry-level new energy brands will inevitably be affected.
For example, some of the new car manufacturers who focus on the low-end, Nezha, Weima, Zero Run and other car companies, their own market position is not stable, and the market competition is so fierce.
The impact of subsidy decline on car companies is mainly reflected in sales and profitability, and the core is whether the amount of subsidy decline is borne by car companies or consumers. Car companies bear the loss of profits, consumers bear the loss of sales. Therefore, if these car companies choose to increase prices, it will affect sales, but if the price is not increased, consumers want subsidies, and it is even more impossible to pay for their own pockets.
In the face of the downward pressure on sales brought about by the decline in subsidies, a number of small and medium-sized car companies also have to face cost pressures such as power battery price increases.
Recently, the upstream lithium salt price continued to rise to break through the 200,000 yuan / ton mark, the price of lithium carbonate exceeded 250,000 yuan / ton, and the price increase of power batteries is also brewing. This will further narrow the living space of small and medium-sized new energy vehicle companies.
【Source: Battery Network】
For the head car companies, in the face of the decline of subsidies for new energy vehicles, it may change the competitive thinking of 'price war', focusing on strengthening their own research and development investment, enhancing the update and iteration of forward-looking technologies such as unmanned driving and intelligent cockpits, and the creation and innovation of high-quality products and services in the closed loop to enhance the comprehensive competitiveness of their own brands in the terminal market.
With the continuous decline of subsidies, the transition from policy to market will eliminate a large number of car companies, and after the reshuffle and reconstruction of the new order, a group of powerful car companies, enterprises that master core technologies and build cars with heart will gradually emerge in the fierce market competition, and eventually lead the new energy automobile industry through elimination and merger.
It is difficult to stop the general trend of new energy
Although the decline in new energy subsidies has been implemented as early as many years ago, it has not hindered the pace of continuous penetration of new energy vehicles into the Chinese market.
Data show that since 2015, China's new energy vehicle sales have ranked first in the world for 6 consecutive years. According to the information released by the China Association of Automobile Manufacturers, the overall sales of new energy vehicles in 2019 fell slightly by 4%; the overall sales volume increased by 10% in 2020.
As of November, the sales volume of new energy vehicles in 2021 has doubled compared with 2020, with production and sales of 3.023 million units and 2.99 million units respectively, an increase of 1.7 times year-on-year, and the penetration rate of new energy vehicles has reached 12.7%, compared with the level of 5.4% at the beginning of last year, and also achieved double growth.
【Source: China Commercial Industry Research Institute】
If the time goes back to a few years ago, perhaps new energy vehicle companies have a lot of pressure on subsidies to decline.
However, with the gradual acceptance of high-end new energy models by consumers, the impact of subsidy decline on some car companies with real power has long been less than that.
For consumers, in the early stage of the development of new energy vehicles, if there is no subsidy, it is difficult for users to raise interest in new energy vehicles.
Because the mileage of new energy vehicles many years ago is also relatively short, the construction of related infrastructure facilities is also extremely imperfect, and the user's experience is very bad. Therefore, at that time, users bought new energy vehicles to a large extent for subsidies, and the amount of subsidies was very high.
However, after the previous development, the infrastructure of the overall new energy vehicle has gradually developed and matured, and in this case, consumers no longer buy new energy vehicles just for subsidies, and worry that there is no place to charge.
It is foreseeable that with the emergence of the leading effect of first-tier cities, as well as the progress of various capabilities of car companies, the improvement of charging and supplementary facilities, and the recovery of supply chains such as future chips, the acceptance of new energy products by domestic consumers will become higher and higher, and the quality of new energy vehicle products will continue to improve.
The rapid growth of the market performance and the increasingly recognized attitude of consumers, as well as the decline in new energy subsidies and the trend of sales growth over the years, can prove that the impact of subsidies on the new energy vehicle market is short-lived.
Moreover, under the national "double carbon strategy", new energy vehicles, as an important indicator, are even more unlikely to stop growth because of subsidies.
After a high march, new energy vehicles have long been driven by policies to markets, and "weaning" will not hinder the general trend of new energy vehicles.