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Author | Zhou Jifeng
Edit | dawn
Carbon credit trading is a "new wealth movement".
In the automotive industry, for example, governments have imposed emissions restrictions on automakers to encourage the development of low-carbon vehicles. Car companies will receive carbon credits if they exceed the tasks set by the government and can sell to car companies that do not meet the standards.
New car-making forces such as Tesla, Weilai, Ideal, and Xiaopeng rely on "selling carbon" to make a lot of money. In 2020, Tesla made $1.58 billion by selling carbon credits alone, compared to just $720 million that year.
The traditional old car companies, at this time, have become "poor students", forced to spend hundreds of millions of yuan to buy points from "juniors".
In 2022, the carbon points that have fed countless new car-making forces suddenly began to plunge in price, and Dong Yudong, head of the Euler brand, revealed: "The carbon credit trading price has been reduced to 500-800 yuan in early 2022. ”
What does carbon credit trading mean for the entire new energy vehicle market? The price of carbon credits has plummeted, what is going on?
How is the "double point" account calculated?
A carbon credit, also known as a "carbon offset credit," is a certificate or license that can be traded.
For example, a power company has an annual carbon emission quota of 6 million tons, if it does a good job of energy conservation and emission reduction, only 3 million tons are emitted, the remaining 3 million tons can be sold to other enterprises that do not have enough emissions. And this transaction needs to be completed in the carbon trading market.
For the automotive industry, different cars contribute differently to reducing carbon emissions. Therefore, a fairer way is needed to measure whether automakers have sold enough environmentally friendly new energy vehicles.
At the earliest, California in the United States formulated the "zero emission vehicle points trading" system, which was later used by the world.
The government generally sets a standard that allows manufacturers to earn a certain number of points for every new energy vehicle that meets the requirements. When the car company reaches the points stipulated by the government every year, it can be exempted from punishment, and if it does not meet the standard, it needs to accept the penalty, or buy the excess carbon credits of other car companies from the market.
Unlike other countries, China's auto industry has not yet officially entered the national carbon emissions trading market. But in 2017, China issued an assessment policy for automakers, the "Double Points Policy", which was revised in 2020. The double credit policy applies to passenger car companies, and policies for commercial vehicles are still being formulated.
The so-called double integral, that is, fuel consumption integral and new energy vehicle integral, is generally referred to as "fuel consumption integral" and "new energy integral" in the industry.
The specific algorithm of double integration is more complicated, in simple terms, in the indicator of "fuel consumption integral", if the fuel consumption of fuel vehicles produced by car companies is higher than the fuel consumption standard formulated by the government, negative integrals will be generated, and fuel consumption will be less than the standard, resulting in positive integrals.
In the "new energy credit", the number of new energy passenger cars produced by the enterprise exceeds the standard stipulated by the government, the more new energy vehicle credits the enterprise can obtain, and if it does not meet the standards stipulated by the government, there will be negative points.
Finally, the sum of "fuel consumption points" and "new energy credits", if positive, indicates that car companies have reached the carbon emission standard in this year. That is to say, all automakers must produce new energy vehicles. Enterprises that do not meet the standards will face penalties and can only stop the production and research and development of new products with high fuel consumption.
Of course, there are also ways to stop losses, such as reducing the production of fuel vehicles with high fuel consumption and selling more new energy vehicles; if new energy vehicles are not sold enough, then points are obtained from affiliated enterprises (including companies that directly or indirectly hold more than 25% of the shares, or imported passenger car suppliers authorized by overseas passenger car manufacturers, etc.); there are also positive points purchased from other enterprises.
In general, if the fuel consumption points of car companies are negative, the high probability of new energy vehicle points is also negative, it is difficult to fully compensate through the internal related enterprise mechanism, so it is also necessary to purchase points to make up.
To put it bluntly, this series of policies is to encourage car companies to produce and sell new energy vehicles.
Who are the big points holders? Who are the needy households?
Since this policy came into effect in 2018, countless car companies have had trouble sleeping and eating.
High carbon emissions have become the Achilles heel of many fuel vehicle manufacturers: under the increasingly stringent double credit policy, the better the fuel vehicles are sold, the more money they earn, the more negative points there are, the bigger the holes, and the higher the cost that needs to be paid for in the future; and although the production of new energy vehicles can earn points, the production and sale of new energy vehicles require huge investment in the early stage, and the share of new energy vehicles will become larger and even encroach on their own fuel vehicle market share...
Many old traditional car companies have thus become difficult households with points.
For example, according to the "2020 China Passenger Car Enterprise Average Fuel Consumption and New Energy Vehicle Credit Accounting Table" released by the Ministry of Industry and Information Technology, joint venture car companies such as FAW-Volkswagen, SAIC-GM, SAIC-Volkswagen, and independent brand car companies such as Geely and Great Wall, these large traditional gasoline vehicles with large volume and heavy displacement and high fuel consumption have become large households with negative fuel consumption and negative new energy points.
The most typical is FAW-Volkswagen, which in 2019 became one of the automakers that created the most "negative points" that year. In 2020, FAW-Volkswagen "lived up to expectations" and ranked first in its negative points, as high as -1.32 million points.
In order to plug this big hole, car companies often need to spend huge amounts of money, and even directly affect the operating performance of the year. Zhu Huarong, chairman of Changan Automobile, publicly stated that Changan Group's bicycle profit reduction caused by double points in 2020 was about 4,000 yuan. From the financial report, the net profit of Changan Automobile bicycle is only 1600 yuan.
Driven by policies, traditional car companies have to start turning the bow. Before 2021, Volkswagen has almost no new energy models. By 2021, Volkswagen has launched five pure electric vehicles in China in one go.
In addition to accelerating the sale of cars, in order to meet the indicators required by the government, these traditional car companies are not allowed to spend huge sums of money to buy carbon credits.
In 2021, there are rumors that FAW-Volkswagen purchased new energy credits from Tesla to help Volkswagen meet the double credit policy of domestic environmental regulations. According to people familiar with the matter, Volkswagen quoted about 3,000 yuan for 1 cent.
When the points can be turned into real money and silver, a new way of making money appears. Those new car-making forces that were once at the bottom of the chain of contempt and established for less than a few years began to lie and win. They do not produce fuel vehicles, so there is no negative "fuel consumption points", and selling a certain number of new energy vehicles can obtain a certain number of positive new energy points.
In 2020, Tesla's new energy vehicle positive points were 860,000 points, becoming the passenger car company with the most positive points for new energy vehicles. This year, the Ministry of Industry and Information Technology has not yet announced the double point accounting situation in 2021. However, according to the calculations of Cui Dongshu, secretary general of the Association, Tesla is still ranked first, and it will receive 1.58 million new energy points in 2021.
Due to the relatively large gap in points, the price of "double integrals" has risen all the way. In 2021, Industrial Securities released a research report on "double integration", which showed that the current transaction price of new energy credits has risen from the initial 300-500 yuan / min to 2500-3000 yuan / min.
The money in the wallets of traditional car companies began to flow continuously to new forces.
From the financial report, you can see how profitable this business is, Tesla's 2020 financial report shows that it earned $1.58 billion by selling points, and by 2021, it still earned $1.465 billion by selling points.
Li Bin, chairman of WEILAI Automobile, said that in the third quarter of 2021, WEILAI new energy credits had 200,000 points, and the profit was 517 million yuan. The ideal third quarter of 2021 financial report shows that 200 million yuan of revenue comes from the sale of 70,000 new energy credits.
Points price waist cut, who hurts the most?
By 2022, this business that can "get rich" seems to have a crisis.
At WEIO's third quarter 2021 earnings call, Li Bin said that it is expected that the amount of points will increase in 2022, and the corresponding price may fall.
Dong Yudong, CEO of great wall motor Euler brand, is more direct: "The price of a single integral in 2021 is about 2500 yuan, but with 2021, the entire new energy vehicle market has grown by 160%. The points trading price has been reduced to 500-800 yuan in early 2022. ”
Why not in half a year, the price of new energy credits will start to diving?
In the "double points" report card of 138 Chinese passenger car companies in 2020, the negative points of fuel consumption were 6.66 million points, and the positive points of new energy were 3.28 million points. There is still a gap of -3.38 million points for "double integration". Supply outstrips demand, and prices are sure to rise.
However, by 2021, new energy vehicles have exploded. According to the data of the Federation of Passenger Vehicles, in 2021, the retail sales of new energy passenger vehicles in China reached 2.989 million units, an increase of 169.1% year-on-year. In 2021, the new energy credits reached 8.43 million points, an increase of 3.01 million points from 5.42 million points in 2020.
Therefore, in 2022, many car companies have a large number of new energy positive points in their hands.
"The whole integral market is oversupplied. The expected points trading price has indeed decreased. Industry insider Zhang Hai pointed out: "However, this year's double integral trading market has not yet opened." Each manufacturer is still in the stage of inquiry. So the actual price is unknown. ”
Zhang Hai further revealed that in fact, the integral transaction is not exactly the spot market, but more of a futures market. Many companies basically choose to sign a 2-3 year point transfer agreement with another company. Since it is a futures market, it is not only supply and demand that affects the price of points, but also expectations for the future, policy changes and so on.
Another noteworthy change is that the difficulty of car companies to obtain new energy credits is increasing year by year.
In June 2020, the Ministry of Industry and Information Technology revised the "Measures for the Parallel Management of Average Fuel Consumption of Passenger Vehicle Enterprises and New Energy Vehicle Credits", which clarified that from 2021 to 2023, the assessment requirements for the credit ratio of new energy vehicles are 14%, 16% and 18% respectively. According to the regulations, only if the new energy credits of car companies reach a certain standard, they can obtain positive new energy credits.
The new energy credit compliance value = the production or import volume of traditional energy passenger vehicles in the accounting year of the enterprise× the new energy vehicle credit ratio requirements. As the proportion of new energy vehicle credits becomes higher, the difficulty for car companies to obtain positive new energy credits is also increasing.
In addition, the points corresponding to models with different mileages are also changing. Electric vehicles that have reached a range of 100 kilometers in previous years can earn 2 points. So for a long time, many traditional car companies are crazy to build cars. For example, SAIC-GM-Wuling, with the sales of Hongguang MINIEV, received 440,000 points in 2021, solving a certain point gap for SAIC.
But now, selling cars is also difficult to solve the problem of double points gap.
The newly revised policy shows that the maximum points for pure electric bicycles in 2021-2023 will be reduced from the previous 5 points to 3.4 points; while the bicycle points of plug-in hybrid vehicles will be reduced by 20% from the previous 2 points to 1.6 points.
This has a greater impact on some car companies that mainly produce micro-electric vehicles. For example, the 120km endurance Offilm MINIEV can get 2 points per car in 2020, but now, the number of bicycle points has dropped by 62.5%, and it can only get 0.75 points / car. Under the new policy, the plug-in hybrid model has only dropped by 20% compared with the original new energy bicycle points. The new policy is good for hybrid vehicles.
Source / Cui Dongshu personal public account
In Zhang Hai's view: "The price of points fluctuates in the short term, but in the long run, it must be more valuable." "Because the assessment standards of the policy are increasing year by year." Car companies need to constantly transform their products, and the cost of obtaining points will also rise.
*The caption and illustration in the text are from unsplash. At the request of the interviewee, Zhang Hai is a pseudonym in the text.