Replace the "old man's music": new energy vehicles leverage the rural market

How big a market will new energy vehicles pry into the countryside? A few days ago, the China Association of Automobile Manufacturers (hereinafter referred to as the China Automobile Association) issued the "2022 New Energy Vehicles to the Countryside Model Declaration Notice" (hereinafter referred to as the "Notice"), according to the document, in order to continuously eliminate the old discontinued models, and promote more new energy models that adapt to the characteristics of rural consumption into the rural model catalog, car companies need to make a unified declaration for models participating in the countryside, and the declaration deadline is March 10, 2022.

Fu Bingfeng, vice president and secretary general of the China Automobile Association, said, "At present, it is a critical period for the promotion of new energy vehicles, and it is very important to sink to the fourth and fifth-tier markets and help rural consumption upgrades, which is an incremental market." ”

According to data from the China Automobile Association, the cumulative sales volume of new energy vehicles going to the countryside in 2021 was 1.068 million units, an increase of 169.2% year-on-year. In addition, among the 66 models of new energy vehicles going to the countryside in 2021, the vehicles are mainly small and micro vehicles with a price of less than 100,000 yuan and a cruising range of less than 300 kilometers. The industry generally believes that the small and micro models of new energy vehicles will replace low-speed electric vehicles such as "Old Man Le" and have good prospects in the rural market.

Sinking or will be normalized, replacing the rural "old man's music"

In recent years, the income growth and consumption expenditure of rural residents across the country have been faster than those of urban residents, and their demand for motorized travel is urgent, but the overall car penetration rate is low. The electrification rate of vehicles used by rural residents is less than 1%, which is only 1/3 of that of urban residents, and there is sufficient room for growth.

In the industry's view, at present, the mainland automobile growth area has begun to expand and shift from the east to the central and western regions, from first- and second-tier cities to third- and fourth-tier cities, and from cities to rural areas. The "Research on Electric Vehicle Travel in Rural Areas of China" released by the China Electric Vehicle 100 Association mentioned that by 2030, the number of cars per 1,000 people in rural areas of the mainland will reach 159, with a total ownership of 70.01 million; this figure also includes the first purchase of consumers in rural areas, and also includes the demand for replacement of low-speed electric vehicles, and the industry believes that the potential for electrification in the rural market is huge.

From the perspective of the needs of third- and fourth-tier cities and rural markets, the travel radius of consumers is small, more than 80% of the residents' families have an average daily travel mileage of less than 50 kilometers, and the short- and medium-range new energy models can meet the needs of mainstream consumer groups; from the perspective of product and price span, models with a mileage of 120 kilometers to 400 kilometers and a price between 30,000 and 80,000 yuan are more in line with market demand; from the perspective of the rural market as a whole, due to driving licenses, driver's licenses and other restrictions, the common name is "old man le" Low-speed electric vehicles are more popular in the rural market.

Therefore, among the 66 models of new energy vehicles going to the countryside in 2021, the vehicles are mainly small and micro cars with a price of less than 100,000 yuan and a mileage of less than 300 kilometers, and the profits of car companies range from 3,000 yuan to 8,000 yuan.

Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, believes that new energy vehicles have done better in terms of quality and handling, higher comfort and safety, and the characteristics of low A00-level costs in the main rural market have also been highlighted to the greatest extent.

The industry generally believes that A00-class new energy passenger cars are alternatives to low-speed electric vehicles such as "Old Man Le", and have good development prospects in the rural market, and Cui Dongshu, secretary general of the National Passenger Car Market Information Joint Association, also has the same view, he believes that A00-class new energy passenger cars have good market prospects in the rural market and can also help improve the travel environment in rural areas.

Li Jinyong, president of the New Energy Vehicle Branch of the Automobile Chamber of Commerce of the All-China Federation of Industry and Commerce, once said, "In the sales of new energy vehicles in 2021, non-restricted cities contributed 70% of the share, of which 58% of users purchased A00-class electric vehicles. A00-class electric vehicles will rely on the advantages of travel costs that are more than half lower than that of fuel vehicles, taking the lead in replacing the same level of fuel vehicles, if the lack of core is not serious, production and sales in 2022 will reach 1.5 million to 2 million. ”

The industry believes that although there are fewer A00-class models currently applicable, due to its more attention driven by new energy going to the countryside, car companies are also harvesting sales performance in the countryside of new energy vehicles, so there may be more products developed for the third and fourth lines and township rural areas.

The industry expects that in the next few years, if it can meet the motorized travel needs of rural residents, it is expected to successfully leverage a 500 billion supercar market, of which small economic electric vehicles will become the main new products in the rural market, or will form a scale of tens of millions in third- and fourth-tier cities and rural areas, becoming an important driving force for the sustained growth of the domestic economy, and the sinking development of new energy vehicles may become normalized.

The sales growth rate of new energy vehicles going to the countryside exceeds that of the overall market

2022 is already the third year that new energy vehicles have gone to the countryside.

In July 2020, the Ministry of Industry and Information Technology, the Ministry of Agriculture and Rural Affairs, and the Ministry of Commerce jointly issued the Notice on Carrying Out New Energy Vehicles going to the Countryside, which proposed to carry out new energy vehicles going to the countryside in China; this also opened the curtain on new energy vehicles going to the countryside. In March 2021, the Ministry of Industry and Information Technology, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce and the General Department of the National Energy Administration jointly issued the "Notice on Carrying Out New Energy Vehicles going to the Countryside in 2021", which clearly stated that new energy vehicles will be carried out from March to December. In 2021, the area of new energy vehicles going to the countryside will be further expanded, from 5 provinces in 2020 to 11 provinces.

Judging from the recommended list of two batches of models for new energy vehicles going to the countryside in 2021, the main enterprises and models are independent brands and new car-making forces, including SAIC Motor, Dongfeng Motor, Great Wall Motor, BYD, Jianghuai Automobile, Chery Automobile, WM Automobile, Zero-run Automobile, etc.

According to data from the China Automobile Association, the cumulative sales volume of new energy vehicles going to the countryside in 2021 was 1.068 million units, an increase of 169.2% year-on-year, and the growth rate was about 10 percentage points higher than the growth rate of the overall new energy vehicle market.

At the beginning of 2022, new energy vehicles going to the countryside will once again be listed as one of the key tasks by the heavy policies of various ministries and commissions.

In early January, the National Energy Administration, the Ministry of Agriculture and Rural Affairs, and the National Rural Revitalization Bureau jointly issued the "Opinions" mentioning that it is necessary to guide charging business operators and new energy automobile enterprises to build charging and replacing power stations in large villages and towns, tourist scenic spots and public parking lots, give priority to promoting the use of electric vehicles by official vehicles, buses and taxis in the county, and promote the application of new energy vehicles in tourist scenic spots and characteristic towns. Promote new energy vehicles to become an important part of rural microgrids, and vigorously support local governments to carry out new energy vehicles and home appliances to the countryside.

On January 21, the National Development and Reform Commission and seven other departments issued the "Implementation Plan for Promoting Green Consumption", which proposes to carry out in-depth activities for new energy vehicles to go to the countryside, encourage automobile enterprises to develop and promote new energy vehicles that meet the travel needs of rural residents, have high quality, low price, and are advanced and applicable, and promote the improvement of the rural operation and maintenance service system. Reasonably guide consumers to buy lightweight, miniaturized, low-emission passenger cars.

According to the latest "Notice" issued by the China Automobile Association, the declared models of new energy vehicles going to the countryside also need to meet four conditions, one is that the product quality is stable to adapt to the rural consumption scenario, the second is that the price range of the model is basically the same as the price consumption range of rural consumers for automobile products, the third is that there will be no suspension and suspension of sales in the next six months, and the fourth is to have a suitable after-sales and sales network.

The shortcomings need to be filled, and supporting measures should also sink into the countryside

It is generally believed that rural areas have independent courtyards, and the charging needs of new energy vehicles are relatively easy to meet. Consumers in rural areas can complete the charging at home through slow charging. However, with the improvement of vehicle mileage and driving radius, public charging piles also have potential market demand in rural areas.

At present, domestic charging piles are mainly concentrated in first- and second-tier cities, while the proportion of public charging piles in rural areas has been hovering at a low level; while the grid infrastructure in rural areas is relatively weak. Cui Dongshu said that the entire infrastructure and supporting services in the rural market are still lacking, and a large number of charging equipment needs to be built.

In addition, the "Rural Electrification Survey Report" released by the China Electric Vehicle 100 Association pointed out that although there are more models and versions of new energy passenger cars sold in the domestic market, the new energy vehicles sold to rural areas are still very limited. The existing models are greatly misaligned with the expectations of rural residents, and at the same time, they cannot meet the demand for light cargo in rural areas.

Not only that, but after-sales is also a big problem. From the perspective of after-sales network laying, fuel vehicles are more perfect, while the after-sales network of pure electric vehicles is more perfect in first- and second-tier cities, while rural areas are still relatively lacking.

Xu Haidong said, "Car companies should further understand the needs of rural consumers, do a good job in cost control and quality control; in the current small number of outlets, do a good job of after-sales service, and build infrastructure to rural areas." ”

In addition, subsidies will also become a factor affecting the new energy vehicles to go to the countryside. Xu Haidong analyzed that there is currently a lack of direct quantification of the amount of state subsidies; and local government subsidies are different, and many fuel vehicles and new energy subsidies are not separated, the time is not uniform, the above will reduce the degree of incentive for consumers.

Although there are many shortcomings in new energy vehicles to be filled, it is undeniable that although the market size of the third- and fourth-tier markets and rural markets is very small, they have great potential, which is one of the future incremental markets for new energy vehicles and will become a "booster" for the growth of the new energy vehicle market.

Beijing News shell financial reporter Wang Linlin Editor Xu Chao Proofreader Zhang Yanjun