Interview with Zeng Qinghong of GAC Group: It is recommended to postpone state subsidies for one to two years

Zeng Qinghong, deputy to the National People's Congress and chairman of THE GAC Group.

"Promote the deep integration of online and offline consumption, promote the recovery of life service consumption, and develop new formats and models of consumption." Continue to support the consumption of new energy vehicles, and encourage local governments to carry out green smart home appliances to the countryside and replace old ones with new ones. ”

"Accelerate the development of the industrial Internet, cultivate and expand digital industries such as integrated circuits and artificial intelligence, and enhance the innovation and supply capacity of key software and hardware technologies."

During the two sessions this year, Premier Li Keqiang of the State Council made a government work report, and once again mentioned the relevant content of the automobile industry. While the government has paid more attention to the development of the industry, the representatives and members participating in the two sessions have also put forward proposals and proposals for the automotive industry, such as delaying subsidies for new energy vehicles and accelerating the development of the automotive chip industry chain.

The new energy automobile industry has burst out of vitality under the dual impetus of policy and market. In 2021, the sales volume of new energy vehicles in mainland China exceeded 3.5 million units, an increase of 1.6 times year-on-year, and the production and sales situation far exceeded expectations, and it will continue to be hot in 2022. However, the industry is still facing challenges such as subsidy decline, energy replenishment anxiety, and tight supply chains.

On March 10, the Beijing News Shell Financial Reporter interviewed Zeng Qinghong, a deputy to the National People's Congress and chairman of the Guangzhou Automobile Group. Zeng Qinghong said that under the dual-driven development of policies and consumer markets, the mainland new energy automobile industry is entering a stage of explosive market growth. But related problems also exist, 2022-2025 is the key opportunity period for the rapid development of the new energy automobile industry, he believes that car companies still need the national subsidy policy in the market side, demand side to release positive signals, provide strong guidance and help.

Zeng Qinghong mentioned that last year's "lack of core" has caused the mainland automobile production to be reduced by about 2 million vehicles, and insufficient independent research and development, high dependence on foreign supply, and lagging behind in the development of the industrial chain are the core problems facing the development of mainland chips. GAC Group will also work with the government and related enterprises to jointly promote the localization of chips and strive to achieve the localization of automotive chips.

It is recommended to postpone the state subsidy for one to two years Pay attention to the replacement of electric models in 2023

Beijing News Shell Finance: What aspects of the auto industry are the main aspects of your proposals or proposals at the two sessions this year?

Zeng Qinghong: At this year's two sessions, I submitted 5 proposals and 1 proposal, mainly involving supply chain supply and supply, independent research and development, double carbon targets, rural revitalization, individual tax adjustment and legal improvement, and other areas related to the automotive industry and the national economy and people's livelihood. Among them, there are three involved in the automotive field, one is to accelerate the development of the automotive chip industry chain; the other is to accelerate the localization process of automotive industry software; the third is to improve the subsidy policy for new energy vehicles. There is also a bill on improving the law on intelligent and connected vehicles.

Beijing News Shell Finance: On February 28, Xin Guobin, vice minister of the Ministry of Industry and Information Technology, said at a press conference of the State Council Information Office that the development of the mainland's new energy automobile industry has entered a new stage of large-scale and rapid development, and it is expected to maintain a high-speed growth trend this year. In your opinion, when will the outbreak time of the new energy vehicle market be?

Zeng Qinghong: In the second half of 2021, the overall automobile market in the mainland began to recover strongly, of which the production and sales of new energy vehicles performed well, and the annual sales of new energy vehicles in the mainland exceeded 3.5 million, an increase of 1.6 times year-on-year, and the production and sales situation far exceeded expectations. Driven by the "double carbon" goal, vigorously developing new energy vehicles has become the consensus of the industry, and under the dual-driven development of policies and consumer markets, the mainland new energy automobile industry is entering a stage of explosive market growth.

Facing the future, GAC Group will seize the new opportunities for the development of electrification, intelligence, networking and sharing in the automotive industry, and the goal of GAC Group is to achieve 50% of the sales of new energy vehicles of its own brands in 2025 and 50% of the group's new energy vehicles in 2030.

The automotive industry has achieved gratifying results in electrification, but it has also encountered many challenges. We believe that there is still a long time to go before multiple energy forms can coexist and develop. Therefore, we have taken the initiative of electrification, hybridization and fuel cell multi-route, in addition to new energy vehicles, but also vigorously develop hybrid vehicles, its own brand GAC Trumpchi will achieve hybridization of all models in 2025, and achieve hybrid sales accounted for 60% in 2030. At the same time, we will increase the development of alternative fuel models, including hydrogen power.

Beijing News Shell Finance: How do you see the impact of the new energy vehicle exemption tax and subsidy policy launched in 2014 on the development of new energy vehicles?

Zeng Qinghong: Since the mainland introduced a series of favorable policies and subsidy measures in 2014, the new energy automobile industry has embarked on a fast road of development and growth, and policy guidance has played a key role in promoting the growth of new energy vehicles in this emerging market, and has effectively enhanced the competitiveness of the mainland new energy automobile industry.

At the level of building a new energy vehicle consumption market, the subsidy policy helps consumers save the cost of car purchase, which greatly enhances the willingness to purchase new energy vehicles; the continuous subsidy policy helps to further expand the scale of the mainland new energy vehicle consumption market, enhance the level of new energy vehicle consumption, promote the healthy and sustainable development of the new energy vehicle market, and ultimately provide a strong development momentum for the transformation of the entire automotive industry from the traditional automobile market to the new energy vehicle market.

Secondly, for car companies, the supply-side subsidy policy is an affirmation and strong support for enterprises to actively innovate and develop new energy vehicles. Encourage automobile enterprises to continue to enhance their comprehensive competitive strength, make full use of historic opportunities and favorable conditions, and reasonably guide the upgrading of the industry structure. Through subsidies, we will help automobile enterprises in terms of costs, promote continuous breakthroughs in core technologies in the field of new energy vehicles, and turn potential advantages into practical advantages.

Beijing News Shell Finance: This year's two sessions of the government work report proposed to continue to support the consumption of new energy vehicles. The Ministry of Industry and Information Technology has also said that it will continue to implement policies such as subsidies for the purchase of new energy vehicles, incentives for charging facilities, and preferential tax reductions and exemptions for vehicles and vessels. However, at the end of this year, the "subsidy" will end, and the development of new energy vehicles will enter the "era of no subsidies", what impact will this have on the development of new energy vehicles?

Zeng Qinghong: 2022-2025 is a key opportunity period for the rapid development of the new energy automobile industry, the support for the supply side is weakened or even cancelled, and the car company level will need to face the challenges of high cost pressure and continuous cultivation of demand-side growth momentum at the same time. Not only does it put forward higher requirements for the strength of car companies themselves, which is not conducive to accelerating the expansion and strengthening of new energy automobile enterprises; and the consumer market still needs the state subsidy policy to release positive signals at the market end and demand side, provide strong guidance and assistance, and enhance the long-term development momentum of the industry from the perspective of stimulating consumption and stabilizing domestic demand.

Therefore, it is recommended that the first is to delay the state subsidy for one to two years, simplify the procedures for receiving the previous subsidy, and alleviate the financial pressure of enterprises; the second is to suggest that the national level consider adjusting the strategic direction of the subsidy policy for the promotion and application of new energy vehicles in the new era to achieve the purpose of "boosting consumption and encouraging construction"; the third is to improve other incentive policies as soon as possible to ensure the effective and sustainable development of the market after the new energy vehicle subsidy is completely stopped, and to complete the "14th Five-Year Plan" goal for the innovative development of new energy vehicles.

Beijing News Shell Finance: At present, the mileage and charging difficulty are still one of the concerns affecting consumers' purchase of new energy vehicles, how do you think to solve the problem of battery life anxiety and charging difficulties? You have also suggested the support of charging pile construction before, how effective is it so far?

Zeng Qinghong: The "Proposal on Accelerating the Development of Intelligent and Connected New Energy Vehicles" submitted by me in 2021 proposes to strengthen the construction of supporting infrastructure and concentrate on solving the problem of "charging difficulties" of new energy vehicles. A few days ago, the Ministry of Science and Technology also replied that the Ministry of Science and Technology combined with the "14th Five-Year Plan" national key research and development plan "new energy vehicles" key special organization and implementation, overall consideration of the key core technology of new energy vehicles, including charging technology, focusing on the key technology of vehicle pile cloud interconnection, charging facility planning methods and orderly charging management technology, high-power wireless charging key technology, power battery rapid replacement key technology and other efficient collaborative charging and replacement key technologies and equipment to strengthen scientific and technological research.

The Ministry of Science and Technology actively organizes the National Automobile Standardization Technical Committee to accelerate the formulation of high-power charging standards, has proposed a revised project plan for charging interface related standards, is organizing the industry to carry out sample development and test verification, and strengthens communication and coordination with the energy industry, promotes the release and implementation of relevant standards as soon as possible, and supports the development of high-power charging technology. It can be seen that although the current charging difficulty problem still exists, it has improved compared with before.

Beijing News Shell Finance: What do you think about the field of power exchange that is constantly increasing in the industry' popularity? Previously, GAC Group also had a layout for the replacement of power stations, is there any further planning to share?

Zeng Qinghong: As one of the main energy replenishment modes of new energy vehicles, the power exchange mode can greatly shorten the waiting time for power replenishment, and achieve a good user experience that recharges as fast as refueling, and even faster than refueling. It can also improve the efficiency of charging and replacing land use per unit of land area, and at the same time maximize the utilization efficiency of battery assets, reduce consumers' concerns about battery quality and maintenance costs, and is more conducive to the promotion of electric vehicles.

At present, GAC Group has launched a series of battery technologies to solve the pain points of battery life, safety, charging speed, etc., further increase the layout and investment in energy ecology, at the 2021 Guangzhou Auto Show we released the "2 Energy Action", and strive to achieve batteries that can be bought and rented, rechargeable and exchangeable, slow charging and fast charging, capacity can be large or small, mileage can be long or short, electricity can be bought, electricity can be sold, and recyclable and cascaded utilization can be realized. At the same time, the power-replaced versions of all models developed based on the new GEP3.0 platform will be launched on the market from 2023 onwards.

Beijing News Shell Finance: How do you evaluate the development of new energy vehicles in the past decade?

Zeng Qinghong: The automobile industry is an important pillar industry of the national economy and plays an important role in national economic and social development. Energy and environmental problems are becoming more and more serious, the development of new energy vehicles is a national strategy, is an important measure to help achieve the "double carbon" goal, but also the direction of the future development of automobiles.

In the past decade, China has developed and cultivated the world's largest consumer market for electric vehicles, and has also become the world's largest producer of electric vehicles. China has built more public charging piles than the United States, Europe and Japan combined.

Since 2009, the state has given a lot of support to the development of the new energy automobile industry in terms of financial subsidies, taxes and industrial promotion, and with the joint efforts of all parties, the mainland new energy automobile industry has gradually grown. After years of accelerated development, China has taken the lead in the research and development capabilities of new energy vehicles, and has continuously tackled key problems in core technologies such as new energy and three electrics, and has made many breakthroughs, and the battery supply chain system is far ahead of the United States and Europe. Taking ourselves as an example, as of the end of last year, a total of 10,288 patents had been applied for, of which invention patents accounted for 40%. Our self-developed sponge silicon anode plate battery technology can achieve a range of more than 1000 kilometers, super-double speed battery technology can achieve 5 minutes of charging and 200 kilometers, and magazine battery system safety technology can realize the ternary lithium battery whole pack of needle prick can not catch fire. We are also developing hydrogen energy vehicles, using hydrogen fuel cells + hydrogen fuel engines two technical routes in parallel. Hydrogen fuel cell vehicles have achieved trial operation last year, and the first hydrogen engine has been successfully ignited. The development of these series of new energy independent research and development technologies is leading in China and even in the world. Our independent new energy brand GAC Aeon also produced and sold more than 120,000 vehicles last year.

In the development process of global new energy vehicles, China has taken the lead in taking the first step, and after ten years of development, it has achieved a first-mover effect, which has greatly enhanced the self-confidence of enterprises and consumers and expanded the voice of Chinese cars on the world stage. It is believed that in the future, with the vigorous development of China's new energy vehicle market and the acceleration of the establishment of a strong intelligent supply chain for automobile electrification, we will achieve a real automobile power.

By 2050, the localization of carbon neutral chips throughout the life cycle of products requires multi-party collaboration

Beijing News Shell Finance: Minister Xin Guobin mentioned that in recent times, a series of research work has been carried out, and the development of the new energy automobile industry has been deeply felt, which is in line with the direction of green and low-carbon development. Carbon reduction as a national strategy, GAC Group also released the "Green Net Plan" in 2021, what is the current progress? What is your insight into the "road to carbon reduction" in the automotive industry?

Zeng Qinghong: We announced the specific goal of the "Green Net Plan" at the 2021 Guangzhou Auto Show: we will achieve carbon neutrality of the whole life cycle of products by 2050 (challenge 2045), in order to achieve this goal, we will implement these three measures simultaneously from the full link of research and development, production and consumer use. At the group level, the response has been rapid, and the organization has established a "double carbon" working body with clear responsibilities to implement and supervise the progress of various work.

In terms of full-cycle management, we will systematically promote the whole chain of carbon emission management from R&D to production, from purchase to use and recycling. In the use link, jointly carry out consumer "carbon reduction" activities, explore the establishment of carbon accounts for automobile consumers, start from corporate incentives, and gradually realize the realization of carbon reduction transactions for individual consumers. At the same time, we will continue to carry out public welfare activities such as afforestation and promote the research and application of carbon sink development methods such as carbon capture technology. It will build gahic's first zero-carbon plant in GAC Aean, achieve zero carbon emissions in 2023, and build a zero-carbon vehicle industrial park based on GAC Zhilian New Energy Automobile Industrial Park; further increase the proportion of intelligent and connected new energy vehicles and energy-saving vehicles. The two routes of "intelligence + electrification" and "intelligence + hybridization" develop synchronously, and GAC Trumpchi is fully hybridized, achieving 50% of the sales of new energy vehicles of its own brands in 2025 and 50% of new energy vehicles in 2030; continue to carry out the development of alternative fuel models including hydrogen energy power.

In addition, GAC Group actively tries photovoltaic power generation and actively helps GAC achieve the goal of "double carbon". By the end of 2021, a total of 680,000 square meters of photovoltaic power generation equipment has been put into use, with an annual power generation capacity of 65.7 million kWh, a cumulative power generation of more than 280 million kWh, and a reduction of carbon dioxide emissions by about 174,000 tons。

Therefore, carbon reduction in the automotive industry is to start from the whole industry chain, from the research and development, production, consumer use of the whole link implementation, do a good job in the management of carbon footprint, to ensure that each link is as energy-saving and emission-reducing as possible.

Beijing News Shell Finance: The technology of automobiles brings opportunities and challenges. Nowadays, the speed of product iteration is accelerating, how do you think car companies should build good cars? What is the layout of GAC Group?

Zeng Qinghong: As the automotive industry accelerates the development of the "new four modernizations", car companies should adhere to the technological innovation as the brand to lay a personalized foundation, with research and development capabilities as the core, to create a strong product strength.

At present, the consumption of Chinese residents is showing a trend of continuous upgrading, the relationship between car companies and consumers has changed from simple trading to multi-dimensional circle interaction, in the fierce competitive environment, car companies must continue to build the uniqueness of their own brands in order to gain consumer recognition. GAC Group aims to build brand uniqueness with the goal of "striving to become a value creator of mobile life", and proposes an e-TIME action plan, which is to adhere to the user experience as the core, continue to make efforts in scientific and technological innovation, intelligence, electrification and intelligent manufacturing, and create high-quality products and intimate services for customers.

Taking GAC's own brand "Gemini" as an example, GAC Aeon continues to create world-class products and services, and it is the core value of GAC Aeon to bring users "one step ahead of the enjoyment of science and technology". To this end, GAC Aean has always regarded scientific and technological innovation as the foundation of its business, and has entered the "five new eras" of new brands, new technologies, new intelligent manufacturing, new products and new ecology. GAC Aeon Intelligent Ecological Factory has four leading advantages: digital independent decision-making, interactive customization, flexible production of steel and aluminum hybrid, and comprehensive utilization of energy. In particular, for the first time, it has realized the transformation from traditional mass production to large-scale interactive customization, with more than 60,000 kinds of customization combinations, fully meeting the personalized and high-quality needs of users, and becoming a benchmark model for Intelligent Manufacturing in China.

Beijing News Shell Finance: The pressure on the global supply chain still exists, and the problem of insufficient production capacity in chips and other links is even intensifying, how does GAC Group view and deal with this problem?

Zeng Qinghong: Affected by the epidemic, the global automobile industry and supply chain have undergone a major test, and last year's "lack of core" has caused the production of mainland automobiles to be reduced by about 2 million vehicles, and GAC has also been affected to a certain extent.

Insufficient independent research and development, high dependence on foreign supply, and lagging development of the industrial chain are the core problems facing the development of chips in mainland China. To this end, GAC Group has strengthened its layout in the field of chips, and GAC Capital has actively laid out key enterprises in the fields of Chips such as Yuexin Semiconductor, Horizon, Chenjing Technology, and Intelligent Networking, helping the supply chain to be independently controllable and the upstream and downstream synergies of the industrial chain to play a role, and further enhance the comprehensive competitiveness of the Group.

In the future, GAC Group will continue to focus on the long-term goals of 2035 and the "14th Five-Year Plan" development plan, and will start from the overall mechanism process to establish and improve the supply guarantee mechanism; jointly promote the localization of chips with the government and relevant enterprises, and strive to achieve the localization of automotive chips. GAC Group is also actively offering suggestions and suggestions, suggesting that the state list chips as key core technologies, and encourage enterprises to accelerate development and technological breakthroughs by increasing industrial support to enhance the self-sufficiency of domestic chip manufacturers.

Five years in office, my two sessions: In the past four years, I have put forward a total of 25 proposals, some of which have been implemented

Beijing News Shell Finance: During your five-year tenure, what bills have you submitted? How has the feedback on these motions been?

Zeng Qinghong: In the past four years, I have put forward a total of 25 proposals, covering the automotive industry, state-owned enterprise reform, laws and regulations, and hot spots in people's livelihood. It has also received the attention of the relevant ministries and commissions of the state (including the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Transport, the National Health Commission, the Chinese Bank, the State-owned Assets Supervision and Administration Commission of the State Council, the State Administration of Taxation, the State Administration of Market Regulation, etc.), each of which has replied, and many of the suggestions have been highly valued by the relevant functional departments, and have been adopted to varying degrees in practical work, and some have been implemented.

For example, the suggestions in the automotive industry include accelerating the construction of infrastructure related to new energy vehicles, promoting automobile consumption, strengthening the construction of the industrial chain of key auto parts, improving the relevant laws and regulations on the recall of defective automotive products, and promoting the development of the scrapped automobile recycling industry; the reform of state-owned enterprises is: on the reform of employee shareholding in state-owned enterprises, the reform of professional managers of state-owned enterprises; the hot issues involving the field of people's livelihood are: vigorously developing community home care, improving various tax reductions and fee reductions, and improving the Cybersecurity Law. Relevant supporting laws and regulations, etc. Last year, in response to the impact of the new crown epidemic, I also put forward suggestions for reducing the burden of the fight against the epidemic and supporting the development of enterprises.

The proposal to increase policy-based financial support for the scientific and technological innovation of core automotive components was replied to by the General Office of the Ministry of Finance. The Ministry of Finance attaches great importance to and vigorously supports the scientific research work related to the core components of the automobile, and through the central financial science and technology plan (special projects, funds, etc.), supports relevant units to carry out relevant scientific research activities in the field of core components of the automobile, and promotes the acceleration of the research and development of the core components of the automobile; and provides stable support to the relevant central scientific research institutes and state key laboratories in the field of core components of the automobile, supports them to improve the basic conditions for scientific research, and independently carry out research. In the next step, the Ministry of Finance will continue to actively support scientific research in the field of automotive core components through existing channels, improve the level of scientific and technological innovation of automotive core components, and provide scientific and technological support for promoting the development of the automotive industry.

Beijing News Shell Finance: Five-year term, what is the thing that impressed you the most?

Zeng Qinghong: One of the most impressive things was that on the morning of March 7, 2018, General Secretary Xi Jinping participated in the deliberations of the Guangdong delegation and delivered an important speech, when I, as one of the representatives of the Guangdong delegation, listened to the general secretary's speech at the scene, which was very exciting and inspiring, and it is still vividly remembered after several years.

At the meeting, the general secretary clearly put forward that "development is the first priority, talent is the first resource, and innovation is the first driving force", and these three "firsts" have become the "golden ideas" for the high-quality development of GAC Group in the past five years.

Beijing News Shell Finance: Use one sentence (or three keywords) to describe your five-year representative career?

Zeng Qinghong: Not to live up to the heavy trust, not to disappoint the mission, to bring the hot issues of concern to the industry, the people and the society to the meeting, this is my consistent work attitude since I performed my duties, and it is also the direction I have been working towards.

Beijing News shell financial reporter Bai Haotian Editor Yue Caizhou Proofreader Liu Baoqing