Starting this year, the installation of the "black box" is mandatory! Will new cars increase in price?

Source/Upstream Journalist Yan Wei

Editor/Xiang Jiaqing

According to the requirements of the Ministry of Industry and Information Technology's newly revised "Technical Conditions for the Safety of Motor Vehicle Operation", from January 2022, newly produced passenger cars must be equipped with EDR systems, that is, driving event recorders.

This device, known as the "black box" of the car, can record the vehicle operation data before and after the accident, and the future "Rashomon" incident involving intelligent driving is expected to be "hammered" through the data of the "black box".

So, after the implementation of the new policy, what is the situation of the "black box" on the car, and will it raise the price of new cars?

Recently, upstream journalists visited the market and found that most new cars have been installed with EDR.

Most of the new passenger cars are already equipped with EDR

The so-called EDR is the car's event data recorder (Event Data Recorder), which can record the key data (speed, ABS status, seat belt status, etc.) of the car's operation in the three stages before, during and after the collision.

"Compared with the driving recorder, which is mostly shallow GPS data and video data, EDR can record driving data more finely, especially the data of tens of seconds before and after the accident, which is equivalent to the 'black box' of the car." Industry insiders said that in the era of fuel vehicles, the cost performance of EDR is not high, but with the rise of new energy and intelligent vehicles, complex electronic control systems, automatic driving technology, there are electric vehicle system failures, driver misoperation, network information security and other safety hazards, EDR has become a just need.

According to high-tech industry research data, there were only 1.3571 million new cars equipped with EDR equipment in 2020, with a market penetration rate of 7.12%. At that time, only some of the cars sold in China were equipped with EDR, such as luxury car configurations such as Lexus, Great Wall's Haval, Xiaopeng G3/P5, BYD Han EV, Weilai, and Wuling Hongguang MINEV. With the landing of the new policy, the new cars of car companies are "moving in the wind".

"All of our Tesla models are equipped with EDR." Tesla's relevant person in charge said. Upstream news reporters learned from the website of the Ministry of Industry and Information Technology that since September last year, all domestic Tesla models have added EDR equipment.

Relevant people of Xiaokang Group also revealed that its models such as the Fengguang New 580 have been equipped with EDR. Jinkang New Energy's new car Q&C M5 released last year is also equipped with a "black box".

"This is a mandatory requirement of the Ministry of Industry and Information Technology, and the models on sale must be installed." Changan Automobile said.

The price of the car has not increased for the time being

Will mandatory EDR cause car prices to rise? "(EDR) cost is relatively low, that is, 300 to 500 yuan, manufacturers can overcome this impact, will not increase the cost of consumer car purchase." Cui Dongshu, secretary general of the China Passenger Car Association, said that the large-scale equipping of new cars with EDR will not cause price increases.

The prospectus of Hongquan Internet of Things (699288.SH) shows that the market price of a single driving recorder is about 500 yuan.

However, industry insiders say that cdr, a tool for reading EDR data, is more expensive. The reading tool (CDR) of the EDR system is mainly provided by Bosch, the entry-level CDR price is 7100 US dollars / set, there is a software upgrade fee of 1000 US dollars per year, and the professional version is 18,000 US dollars / set; kia, Hyundai, Subaru, Mitsubishi and other car companies produce their own CDR price is also 6300-7000 US dollars / set, and the software maintenance fee is paid every year.

Related concept stocks rose in response

Contrary to the performance of the market terminal car price, affected by the mandatory regulations, the relevant domestic concept stocks rose in response.

On November 8 last year, the secretary of the board of directors of Qiming Information replied to investors' questions on the investor interaction platform: "The company has mature EDR-related data storage products, and a large number of applications in commercial vehicles, providing customers with sound data processing solutions." Since then, Qiming Information has opened a rising channel, soaring all the way, and harvested four up and down boards in the past 5 trading days.

At 9:36 on February 14, the EDR concept sector index reported 883.374 points, an increase of 2%, with a turnover of 359 million yuan and a turnover rate of 0.17%. Among the individual stocks in the sector, the top 5 stocks with the largest gains were: Qiming Information reported 17.99 yuan, up 10.03%; Ruiming Technology reported 37.44 yuan, up 6.39%; Derun Electronics reported 13.35 yuan, up 4.46%; Hongquan Internet of Things reported 32.12 yuan, up 4.02%; Tianmai Technology reported 24.01 yuan, up 2.48%.

Brokers believe that related concept stocks are expected to continue to benefit.

The EDR market size is expected to break through 10 billion yuan

"Not only will it not lead to an increase in car prices, but large-scale installations will then spawn another huge EDR market." Industry insiders said.

At present, the main players in the EDR industry chain include vehicle-grade MCU chip companies, automotive airbag companies, and vehicle networking related companies. There are not many companies that independently supply passenger car EDR hardware products by domestic manufacturers, and most manufacturers have layouts in the field of EDR in the field of commercial vehicles, such as Hongquan Internet of Things, Ruiming Technology, Qiming Information, etc. However, due to the front-loading mode of passenger car EDR, the safety and reliability requirements for vehicle specifications are high, and independent EDR manufacturers need a long verification cycle to enter the OEM.

CITIC Securities believes that since the DVR equipment that meets the provisions of GB/T 38892 exceeds the EDR equipment in terms of cost and equipment complexity, it is judged from the "Announcement of Road Motor Vehicle Manufacturers and Products" of the Ministry of Industry and Information Technology that most car companies have chosen EDR solutions. According to the calculation of 23 million new passenger cars in 2022, it is conservatively estimated that after 2022, there will be more than 80% of the incremental market for new car installations, which corresponds to a market space of 9.2 billion yuan.

Huaxi Securities Research Report also shows that China's passenger car market has basically stabilized at about 20 million units in the past 5 years, assuming that with the rapid popularization of EDR, equipment prices have fallen sharply, and the price is expected to stabilize at about 500 yuan, and the market space for EDR equipment is conservatively expected to be about 10 billion yuan, of which the industrial chains such as sensors, storage, MCUs, and spare batteries have benefited greatly.