Every year at the "two sessions" time, some proposals or suggestions related to automobiles can often become hot topics. Specific to this year, Lei Jun, who just founded Xiaomi Automobile, and Li Shufu, chairman of Geely Automobile, put forward relevant proposals for issues such as fast charging and power replacement technology. Li Shufu believes that the power exchange mode is especially suitable for heavy trucks, online ride-hailing vehicles and taxis, so it is recommended that the power exchange mode be standardized and generalized.
In addition, because the entire automotive industry experienced the pain of "lack of core" last year, especially involving the problem of "card neck", automotive chips have also become the focus of this session. Chen Hong, chairman of SAIC Motor, Zeng Qinghong, chairman of GAC Group, Wang Fengying, president of Great Wall Motor, and other leading figures in the automotive industry have all made suggestions for chips. But the most explosive suggestion may come from the 4 ban on the sale of fuel vehicles submitted by Zhang Tianren, chairman of the Energy Group.
In his view, because the timetable for banning the sale of fuel vehicles has not been clear, the whole society and the whole industry are "waiting and seeing", which affects the speed and effect of carbon reduction. It is based on this that he raised the issue of banning the sale of fuel vehicles. But the big question is whether China's national conditions will be suitable for announcing a clear "ban on the sale of fuel vehicles" like those in Europe.
European countries scramble to "ban combustion"
In fact, the trend of "banning the sale of fuel vehicles" first began to hang from European countries. As early as the United Nations Climate Change Conference in Paris in 2015, Norway, the Netherlands, the United Kingdom, Germany, and 18 states in the United States formed a "Zero Emission Vehicle Alliance", and one of the signature initiatives of this alliance is to promise that by 2050, countries and regions belonging to the alliance will no longer sell fuel vehicles.
Since then, various countries have announced their own "ban on the sale of fuel vehicles" timetable, such as the Netherlands and Norway, as representatives of developed countries, announced that they will officially stop selling fuel vehicles in 2025, the pace of traditional car power Germany has slowed down slightly, announcing the suspension of the sale of internal combustion engine vehicles in 2030, and the time point in France is 2040. It is worth mentioning that as one of the world's largest developing countries, India has also announced that it will ban the sale of fuel vehicles in 2030.
In fact, not only some countries and regions in Europe and the United States are actively peddling the view of "banning the sale of fuel vehicles", but also some multinational car giants in Europe and the United States have also announced their own "stop selling fuel vehicles" timetable.
Volvo Cars here may be a special case. Volvo Cars' pure electric brand Polestar rejected fuel power almost as soon as it was born in 2017, instead focusing on hybrid and pure electric. In addition, Volvo Cars itself has also released a huge electrification plan, which of course includes a "ban on the sale of fuel vehicles" - in 2030, Volvo will become a luxury pure electric car company.
In addition to Volvo Cars, Mercedes-Benz Smart, Lamborghini, Hummer to achieve electrification in 2022, that is, this year, of which Hummer is already a dead brand, and now successfully resurrected through electrification. Nissan, Infiniti and other car companies have a fire ban node in 2025 and Audi in 2026, but it is already relatively fast in BBA luxury brands. BMW and Mercedes-Benz both chose 2030, and Volkswagen and Hyundai Kia are after 2035.
Most of these car brands from Europe and the United States, why rush to embrace electric vehicles? Are they really meant to play the role of "technological innovation" leader style?
Not really. That's because the European Union unveiled a climate plan called Fit for 55 in mid-last year, which calls for a 55 percent reduction in greenhouse gas emissions by the end of 2030 than it was in 1990. Some of the regulations involving cars, in 2035, the EU's car emissions will be 100% lower than in 2021, which actually means that the EU will completely ban the sale of fuel vehicles in 2035 – but can this policy work in China?
"Banning combustion" is not a panacea
From the perspective of resource endowments alone, the situation between China and the EU is completely different. The EU's PER GDP in 2020 was as high as $34,000, while China's was in its early $10,000s in the same period. This means that if China wants to push for a one-size-fits-all ban on the sale of fuel vehicles like the European Union, the outstanding problem it will face is the problem of how to develop.
In addition, the energy structures of China and the EU are also very different. In China's energy mix, fossil energy (coal, oil and gas) accounts for 85%, and the EU figure is 75%. In addition, China is "rich in coal and short of oil and gas", and coal accounts for more than 50% of primary energy. Correspondingly, the EU's coal accounted for only 13%, so the EU's environmental protection foundation is relatively good.
One of the situations caused by this energy structure is that the EU has relatively promoted the ban on the sale of fuel vehicles, paying less cost and smooth switching. But the situation in China is more complicated, and the switching cost will appear to be very high, so the "ban on combustion" is not a panacea for China's carbon neutrality and carbon peaking plan. It is based on this consideration that China has not announced so far that it will "ban the sale of fuel vehicles" at any point in time.
But China also has one of the best practices, that is, to conduct local tests to examine the practical effects of the "ban on the sale of fuel vehicles". On March 6, 2019, Hainan Province officially released the "Hainan Provincial Clean Energy Vehicle Development Plan", which clearly stated that Hainan will completely ban the sale of fuel vehicles from 2030. Hainan has thus become the first province in the country to propose a timetable for "banning the sale of fuel vehicles" in 2030. In addition, Hainan is also a province that has adopted a diversified route, and it is necessary to form a new energy development layout based on charging, supplemented by gas, and hydrogenation in advance.
Also in 2019, the Ministry of Industry and Information Technology issued the "Reply to Recommendation No. 7936 of the Second Session of the Thirteenth National People's Congress", which clearly pointed out
Pilot projects such as fuel vehicle prohibition zones will be set up, and qualified localities and fields will be supported to carry out pilot projects such as urban bus rental substitution and the establishment of fuel vehicle prohibition zones, and on the basis of success, the overall study and formulation of a timetable for the withdrawal of fuel vehicles will be planned.
Specific to the current situation, with the further escalation of the War between Russia and Ukraine, the price of No. 92 gasoline has once again stood at the 8 yuan mark after 4 years, which will make the topic of "banning the sale of fuel vehicles" continue to gain high attention.
But despite this, some problems have not been clearly resolved – first and foremost the problem of infrastructure not keeping up. Although the current charging speed and charging pile density have increased a lot, hard injuries such as long charging time and battery mileage are still plaguing new energy vehicles. On the other hand, the retention rate of new energy used cars is also a big problem. Taking Tesla as an example, the retention rate after three years is only 50%, far lower than the 55%-70% of fuel vehicles. This has largely limited the promotion and popularization of new energy vehicles. Finally, the problem of decommissioned batteries has not yet formed a perfect industrial chain.
How Chinese car companies respond
Although China does not have a clear timetable for banning the sale of fuel vehicles, Chinese car companies have begun to act and generally take this new energy revolution as an opportunity to change their industry seats. One of the most positive is BYD. So far, the car companies that have announced that they will stop selling fuel vehicles by 2040 are Volvo, Mercedes-Benz, General Motors, Ford, Jaguar, Land Rover, etc., of which BYD is the only Chinese car company. This may mean that BYD will go to the global market.
Moreover, China also has a unique "double points" policy, which is actually aimed at promoting more car companies to accelerate the transformation of electrification. Among them, Changan and BAIC have said that they will stop selling fuel vehicles in 2025, and Haima said that they will eliminate traditional fuel models in 2025. The role of this policy is a bit like China's increasingly strict emissions policy, that is, to force car companies to electrify through technical standards.
From the current situation, China has come to the forefront of the transformation and upgrading of the automobile industry in the world - in 2021, China's new energy sales exceeded 3.52 million vehicles, maintaining the world's first for 7 consecutive years, while China's car companies, such as BYD, Great Wall, Geely, Changan, BAIC, FAW, SAIC, GAC, etc., are also significantly more than European, American and Japanese and Korean car companies in electrification transformation.
This shows that Chinese car companies are more pragmatic – directly through the introduction of a large number of pure electric models, competing with multinational car giants. In order to improve the brand image of the previous low positioning, Chinese car companies have also launched a large number of new energy brands. For example, GAC Ean, SAIC Zhiji, BAIC Jihu, Changan Avita, Geely Krypton, and Great Wall Salon and other brands. In addition, there are some "new car-making forces" brands that have made a name for themselves in the world, such as Weilai Automobile and Ideal, Xiaopeng and so on.
Correspondingly, although the Sales volume of the European new energy market is also good, it has just started, and some traditional car companies, including Volkswagen, are not fully prepared for electrification transformation, which is equivalent to giving Chinese car companies a period of development opportunities of about three or five years. In the context of "carbon neutrality" becoming a global consensus, China's electric vehicle industry has quietly walked in the forefront of the world. Most importantly, China's independent brands have successfully found their place in this century-old technological change in the automotive industry, and have the strength to call the international giants.
The people evaluate the car
In fact, according to the current trend of the development of China's automotive industry, we have seized some innovative commanding heights closely related to the dominance of the automobile industry, including power batteries, intelligent driving technology, big data, 5G, etc. In this case, the withdrawal of fuel vehicles from the historical stage is actually only a matter of time, we do not need to rush to push the so-called "ban on combustion", which may hurt the momentum of industrial development, and play some counter-effects. The most important thing is to grasp the trend of new energy in the industry, in the context of carbon neutrality, do a good job in technology research and development and product layout, so as to compete with multinational giants in the global market - one day, the "ban on combustion" will naturally come, rather than one-size-fits-all mandatory.