CFIC Guide
◆ According to the current policy objectives and the market space for automobile consumption, it is expected that by 2035, China's new energy vehicle sales will have 6 to 8 times the growth space.
□ As of 2021, China's new energy vehicle production and sales have ranked first in the world for seven consecutive years, becoming the world's largest new energy vehicle country. China's new energy vehicle market penetration rate is entering the fast lane of high growth. From 2021 onwards, new energy vehicles will fully enter the market-driven stage, with an annual market penetration rate of 13.4%, and the "golden fifteen years" of the new energy vehicle market is coming. According to the current policy objectives and the calculation of the market space for automobile consumption, it is expected that by 2035, China's new energy vehicle sales will have 6 to 8 times the growth space.
□ Successive energy revolutions have promoted the industrial revolution and created a new international order. The first energy revolution, the power unit is the steam engine, the energy is coal, the means of transportation is the train, the United Kingdom surpasses the Netherlands; the second energy revolution, the power unit is the internal combustion engine, the energy is oil and gas, the energy carrier is gasoline and diesel, the means of transportation is the automobile, the United States surpasses the United Kingdom; currently in the third energy revolution, the power unit is the battery, the energy is shifted from fossil energy to renewable energy, the energy carrier is electricity and hydrogen, the means of transportation is new energy vehicles, and China is expected to show new technological advantages in this process.
Global new energy vehicle development planning
At present, many countries and regions have successively introduced various support policies to promote the technological upgrading and market promotion of new energy vehicles. In terms of supporting the development of new energy vehicles, the attitude of various countries is relatively unified.
First, the global fuel vehicle ban timetable and the development goals of new energy vehicles
The overall planning of new energy vehicles is divided into two categories: the timetable for the ban on the sale of fuel vehicles and the development goals of new energy vehicles.
1, in terms of fuel vehicle ban, from the disclosure of countries, Norway, Germany, Japan, the United States, the Netherlands, britain, France, Portugal and other countries have announced the fuel vehicle ban time, of which Norway is the most radical, the time node is 2025, the rest of the countries are concentrated in 2030 to 2040.
In addition to Hainan Province, which announced a total ban on the sale of fuel vehicles in 2030, other provinces in China have not yet announced the timetable for the ban on the sale of fuel vehicles. In August 2019, the Ministry of Industry and Information Technology clearly stated in the "Reply to Recommendation No. 7936 of the Second Session of the Thirteenth National People's Congress" that in the future, it will adapt measures to local conditions and classify policies, and support qualified localities and fields to carry out pilot projects such as urban bus rental substitution and the establishment of fuel vehicle prohibition zones.
2. In terms of new energy vehicle development goals, Norway is the most aggressive, and China is relatively active and stable. Judging from the official disclosure of various countries, new energy vehicles account for 100% of new car sales in Norway by 2025, 50% in the United States by 2030, and China adopts a gradual improvement strategy according to the "Energy-saving and New Energy Vehicle Technology Route Map 2.0", which is 20% by 2025, 40% by 2030, and 50% by 2035.
Judging from the timetables planned by various countries, the development of global new energy vehicles has been determined to enter the fast lane, and the penetration rate of global new energy vehicles will increase rapidly in the next 10 years to complete the self-determined goals of various countries. Due to the large population, large differences in land area and regions, China has not launched a compulsory ban on the sale of fuel vehicles, but the state's attitude of fully supporting the development of new energy vehicles is clear.
Second, the mainland new energy vehicle long-term strategic development strategy
The long-term development plan for new energy vehicles in the future is mainly based on the "New Energy Vehicle Industry Development Plan (2021-2035)" issued by the General Office of the State Council on November 2, 2020. This development plan clarifies the key points of the long-term planning of new energy vehicles in the mainland:
First, by 2025, the average electricity consumption of new pure electric passenger cars will drop to 12.0kWh/100km; the sales volume of new energy vehicles will reach about 20% of the total sales of new cars; highly autonomous vehicles will achieve commercial applications in limited areas and specific scenarios; improve the construction of charging and replacing, hydrogenation infrastructure; relax market access and improve the double integration policy.
The second is to strive to become the mainstream of new sales vehicles by 2035, and fully electrify public vehicles; realize commercial application of fuel cell vehicles, and achieve large-scale application of highly autonomous vehicles; convenient and efficient charging and replacement service networks, and the construction of hydrogen fuel supply system is steadily advancing, effectively promoting the level of energy conservation and emission reduction and the improvement of social operation efficiency.
Based on the "Energy-saving and New Energy Vehicle Technology Roadmap 2.0", at present, the focus of the development of new energy vehicle technology in mainland China is on electrification and intelligent networking, and the specific development path is planned as follows:
First, in terms of fuel consumption of energy-saving vehicles, the average fuel consumption targets of new vehicles by 2025, 2030 and 2035 are proposed, of which passenger cars (including new energy) are 4.6L/100km, 3.2L/100km, 2.0L/100km, respectively; traditional energy passenger cars (excluding new energy vehicles) are 5.6L/100km, 4.8L/100km, 4.0L/100km, and hybrid passenger cars are 5.3L/100km, 4.5L/ 100km、4.0L/100km。
Second, in terms of pure electric and plug-in hybrid vehicles, by 2035, form an independent and complete industrial chain, and the technical level of independent brand pure electric and plug-in hybrid vehicle products is synchronized with the international standard; new energy vehicles account for more than 50% of total vehicle sales, of which pure electric vehicles account for more than 95% of new energy vehicles; realize the promotion and application of pure electric technology in the fields of family cars, official cars, taxis, rental service vehicles and short-distance commercial vehicles.
Third, in terms of intelligent networked vehicles, by 2025, L2 and L3 intelligent networked vehicle sales will account for 50%, and L4 intelligent networked vehicles will enter the market; by 2030, L2 and L3 intelligent networked vehicle sales will account for 70%, L4 intelligent networked vehicle sales will account for 20%, and L4 intelligent networked vehicles will be widely used in highways and applied on some urban roads; by 2035, L4, L5 intelligent networked vehicles have the ability of networked collaborative decision-making and control with other traffic participants, and all kinds of networked highly autonomous vehicles are widely operated in a wide range of china.
Fourth, in terms of electric drive systems for new energy vehicles, by 2035, the overall products of new energy vehicle electric drive systems in the mainland will reach the international advanced level. Among them, the passenger car motor specific power reaches 7.0kW/kg, the motor system exceeds 80% of the high efficiency zone 95%, the passenger car motor controller power density reaches 70kW/L, and the pure electric drive system has a specific power of 3.0kW/kg.
Fifth, in terms of charging infrastructure, by 2035, more than 150 million slow charging port will be built (including own piles and public piles), and 1.46 million public fast charging ports (including special vehicles) will be built, supporting the charging and operation of more than 150 million vehicles, and realizing the large-scale application of urban taxi and online car sharing and replacement mode.
A new round of energy revolution and new energy vehicles
First, the energy consumption structure has been upgraded, and the world has ushered in the third energy revolution node
Counting this new energy revolution, mankind has experienced a total of three energy revolutions in history. In the first energy revolution, the power unit was the steam engine, the energy was coal, and the means of transportation were trains. In the second energy revolution, the power unit is the internal combustion engine, the energy source is oil and gas, the energy carrier is gasoline and diesel, and the means of transportation are cars. Now the world is in the third energy revolution, the power unit is the battery, the energy is renewable energy, the energy carrier has electricity and hydrogen, and the means of transportation are electric vehicles. In the course of the first energy revolution, the United Kingdom surpassed the Netherlands; during the second energy revolution, the United States surpassed the United Kingdom; and in the ongoing third energy revolution, China is expected to achieve curve overtaking.
The current situation of mainland energy is "lack of oil and gas", in order to ensure the sustainable development of the country, the energy consumption structure needs to be upgraded. The mainland is currently the world's second-largest oil consumer after the United States, but as of 2018, China's proven oil reserves accounted for only 1.5% of the world's total proven reserves. Crude oil production on the mainland is relatively stable, but consumption continues to rise. According to the National Bureau of Statistics, the mainland's crude oil production has been around 200 million tons since 2015. In contrast, crude oil consumption on the mainland is rising, rising from 543 million tonnes in 2015 to 736 million tonnes in 2020. Mainland crude oil imports increased from 336 million tons in 2015 to 542 million tons in 2020, with a foreign dependence of more than 70%. Such an energy consumption structure is extremely unfavorable to the future economic development of the mainland, so through the development of new energy vehicles, it will effectively transform fossil energy consumption into electricity consumption and alleviate the national energy pressure, which is of great strategic significance to the mainland.
Second, assume the responsibility of the international community, achieve the "double carbon" goal, and seek sustainable development
Climate issues are one of the most significant challenges facing the world. On September 22, 2020, at the 75th session of the United Nations General Assembly, the mainland officially put forward the goal of achieving carbon peaking by 2030 and carbon neutrality by 2060. Based on the long-term accumulation in the fields of clean development, grid interconnection, climate and environment, the Global Energy Internet Development Cooperation Organization, which was initiated by China, conducted in-depth research on the mainland's carbon emission reduction path and energy and power transformation plan, and completed the three research results of "China's Carbon Peak before 2030", "China's Carbon Neutrality Research Report before 2060", "China's 2030 Energy and Electricity Development Plan Research and 2060 Outlook" in December 2020. It is proposed to lead the construction of China's energy Internet with UHV power grids, accelerate the promotion of clean alternatives to energy development and energy consumption ("two alternatives"), and achieve a systematic emission reduction path and scheme for clean energy production, energy use ("double dominance"), energy and electricity development and carbon decoupling, economic and social development and carbon emission decoupling ("double decoupling").
"Carbon peaking" refers to the mainland's commitment that by 2030, carbon dioxide emissions will no longer grow, peak, and begin to decrease thereafter; "carbon neutrality" refers to the total amount of greenhouse gas emissions directly or indirectly generated by enterprises, groups or individuals by 2060, through afforestation, energy conservation and emission reduction, etc., to offset their own carbon dioxide emissions, to achieve "zero emissions" of carbon dioxide.
Since the carbon emissions of mainland vehicles account for a relatively large proportion and are mainly concentrated in the fuel cycle, the development of new energy vehicles is an important part of achieving the "double carbon" goal.
First, mainland vehicle carbon emissions account for more than 80% of carbon emissions in the transportation sector, accounting for about 7.5% of the total social carbon emissions. According to the International Energy Agency, global road transport accounts for 75% of the entire transport sector, followed by shipping and water transport at 11% each, and railways accounting for 3%. According to the China Automotive Technology and Research Center, automobile carbon emissions account for more than 80% of the carbon emissions in the mainland transportation sector, accounting for about 7.5% of the total social carbon emissions.
Second, the fuel combustion in the use stage of traditional fuel vehicles is the main factor causing high carbon emissions in the use stage of the car. In 2020, the carbon emissions from the car use phase will be about 720 million tons, accounting for about 90% of the carbon emissions of the car. From the perspective of carbon emissions throughout the life cycle of automobiles, the life cycle of automobiles is divided into fuel cycle, that is, the production and use of fuels; and vehicle cycles, that is, material parts, production and maintenance. According to the 2021 "China Automotive Low Carbon Action Plan Research Report (2021)" released by the China Automotive Technology and Research Center, the total carbon emissions of 580 models (392 gasoline vehicles + 112 pure electric vehicles) in the report are about 670 million tons, of which carbon emissions from the fuel cycle account for more than 70%, and gasoline vehicles account for 98% of the carbon dioxide emissions generated by the fuel cycle.
In the future, the development of new energy vehicles is conducive to continuously reducing carbon emissions in the fuel cycle and production cycle, so as to achieve carbon neutrality in the whole industry chain. First, the cleaning of the upstream power grid increases the proportion of clean energy power generation. In 2021, the proportion of wind power and photovoltaic power generation in the whole society will reach 11%. According to the National Energy Administration, this proportion will rise to about 16.5% by 2025. The second is to continuously reduce the consumption of vehicles and batteries through production technology innovation, increase in the proportion of recycled materials, and energy efficiency in the use of power batteries and hydrogen fuel cells. It is worth noting that pure electric vehicles do not mean zero carbon dioxide emissions, but only greatly reduce the emissions generated by oil combustion in the fuel cycle. At present, the fuel cycle carbon emissions of electric vehicles still account for 50%, which mainly comes from the production of power batteries. With the further development of power battery production technology, the proportion of carbon emissions in fuel production is expected to be reduced to 10%.
The development of new energy vehicles in China is entering the fast lane
First, China's new energy vehicle market has shifted from policy-driven to market-driven
Looking back at the development of the new energy automobile industry in the mainland, the initial stage of industrial development is mainly based on policy guidance, which can be roughly divided into three stages:
Embryonic period (2009-2013): Policy bias towards the government side and the enterprise side. In 2009, the Ministry of Science and Technology, the Ministry of Finance, the National Development and Reform Commission, and the Ministry of Industry and Information Technology released the "Ten Cities and Thousands of Energy-saving and New Energy Vehicle Demonstration and Application Project". At the same time, the Ministry of Finance and the Ministry of Science and Technology jointly issued the "Interim Measures for the Management of Financial Subsidy Funds for the Demonstration and Promotion of Energy-saving and New Energy Vehicles" to give a one-time fixed subsidy for the purchase of energy-saving and new energy vehicles such as hybrid, pure electric and fuel cell vehicles in pilot cities. In 2010, the State Council listed new energy vehicles as one of the seven strategic emerging industries, and further implemented the subsidy system. At this stage, the public sector demonstration is the mainstay, various policy tools are gradually enriched, technology and market are still being cultivated, and the growth rate of model sales is slow.
Growth period (2014-2018): Since 2014, subsidies have begun to exert efforts on private users, and high car purchase subsidies have encouraged private purchases of new energy vehicles. In August 2014, the Ministry of Finance and other departments jointly issued the Announcement on Exemption from New Energy Vehicle Purchase Tax, and at the end of 2017, the period of exemption from new energy vehicle purchase tax was extended to the end of 2020. At this stage, the sales of electric vehicles have grown rapidly.
Adjustment period (2019 to 2020): Since 2017, financial subsidies have entered a period of decline, and in 2019, the decline has begun to accelerate. Among them, the subsidy standard from 2019 to 2020 decreased by 40% compared with 2016. In 2021, the subsidy standard for new energy vehicles will decline by 20% compared with 2020. On December 31, 2021, the Ministry of Finance, the Ministry of Industry and Information Technology and other four departments issued the "Notice on Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles", requiring that the subsidy standard for new energy vehicles in 2022 should be reduced by 30% on the basis of 2021; the subsidy standard for urban buses, road passenger transport, taxi (including online car-hailing), sanitation, urban logistics distribution, postal express delivery, civil aviation airports and vehicles in the official field of party and government organs should be reduced by 20% on the basis of 2021. The subsidy policy for the purchase of new energy vehicles in 2022 will be terminated on December 31, 2022, and vehicles licensed after December 31, 2022 will no longer be subsidized.
Judging from the growth rate of sales volume over the years, the growth rate of new energy vehicles in the mainland has basically kept pace with the policy direction in the past, and the policy drive is obvious. According to the China Automobile Association, after the policy encouraged private car purchases, the sales of new energy vehicles in mainland China in 2014 and 2015 increased by 320% and 340% year-on-year, respectively. Since then, in 2016, 2017 and 2018, the market has entered a period of stable development, and the sales growth rate has slowed down synchronously, increasing by 53%, 53% and 62% year-on-year, respectively. Subsequently, the policy began to adjust, the financial subsidies fell sharply, and the sales growth of new energy vehicles in 2019 and 2020 was -4% and 13% year-on-year, respectively, and the sales growth rate was greatly reduced and negative growth for the first time.
However, under the dual pressure of subsidy decline and weak consumption caused by the epidemic, China's new energy vehicle market has ushered in a new stage of outbreak in 2021, which indicates that China's new energy vehicle market has fully entered a market-driven period, and in the future, people buy new energy vehicles to tend to demand for new energy vehicles, and recognize new technologies and supporting facilities. According to the China Automobile Association, China's new energy vehicle sales in 2021 were 3.521 million units, an increase of 160% year-on-year, and the market penetration rate was 13.4%, and the single-month penetration rate reached 19.1% in December. According to the current situation, the target of "new energy vehicle sales reaching 20% of the total sales of new vehicles in 2025" previously formulated by the mainland in the "New Energy Vehicle Industry Development Plan (2021-2035)" may be completed ahead of schedule. In 2022, China's new energy vehicle sales are expected to exceed 5 million. In 2035, the sales volume of new energy vehicles is expected to account for more than 60%.
Second, the future development of China's new energy vehicles five major trends
First, penetration will enter the fast lane of high growth.
The penetration rate of new energy vehicles will maintain a high growth rate, and the new energy vehicle market may usher in a golden fifteen years. Globally, it is expected that by 2025, global sales of new energy vehicles will reach 18 million; by 2030, global electric vehicle sales are expected to be more than 30 million. From a domestic point of view, by 2035, the sales of new energy vehicles in the mainland are roughly estimated to have 6 to 8 times the growth space. According to the "Energy-saving and New Energy Vehicle Technology Roadmap 2.0" led by the Society of Automotive Engineers of China, the overall penetration rate of new energy vehicles in mainland China is planned to be 20% in 2025, 40% in 2030, and 50% in 2035. In the single month of December 2021, the penetration rate of domestic new energy vehicles reached 19.1%, and the annual market penetration rate was 13.4%, so by 2035, new energy vehicles have nearly 4 times the growth space in terms of penetration rate. Looking at the overall Chinese auto market, mainland automobile sales reached a peak of 28.88 million in 2017, and then entered a short-term adjustment, and car sales in 2018, 2019 and 2020 all declined year-on-year. In 2021, China's auto sales turned positive again, at 26.28 million units, an increase of 3.8%, ending the adjustment period. If according to the annual growth rate of 3% to 5% forecast, by 2035, China's annual automobile sales are expected to reach the current 1.5 to 2 times, about 45 million vehicles, and then superimpose 4 times the penetration rate growth space, it is expected that by 2035, new energy vehicle sales still have 6 to 8 times the growth space, the development prospects are very broad.
Second, domestic independent brands are expected to continue to surpass foreign veteran car companies.
In 2016, The concentration indicators of China's new energy vehicle market CR1, CR3, CR5 and CR10 were 31.6%, 57.3%, 70.1% and 95.6% respectively, and by 2021, they fell to 19.5%, 44.5%, 53.4% and 70.1% respectively, and the concentration of the market has dropped significantly, and many new brands have poured into the market to seize market share.
From the sales data point of view, in 2021, the car company's byd, SAIC-GM-Wuling, Tesla and other three companies occupy nearly 50% of the market share, while "Wei Xiaoli" and other new car-making forces performed brightly, Xiaopeng, Weilai, Ideal and other domestic brands ranked 7th, 8th and 10th respectively; the sales of new energy models at the model end are almost all domestic independent brands, and the sales of TOP15 models, in addition to Tesla's Model 3 and Model Y, the rest are domestic independent brands. And that's been the norm for the last two years. Compared with foreign car companies, domestic independent brands have achieved rapid growth in the sales of new energy vehicles with their design concepts close to the people and black technology, but occupy a certain first-mover advantage.
Third, the marketization of the industry is accelerating, and the future growth point will be in non-restricted purchase areas such as third- and fourth-tier cities.
From the demand side, the accelerated marketization of China's new energy automobile industry has four characteristics, the penetration rate of first- and second-tier cities has basically remained stable, and the future market growth point is in third- and fourth-tier cities. From a technical point of view, BEV pure electric vehicles are favored by consumers, sales dominate, and the market share remains at 80%. In terms of regions, the proportion of new energy vehicles in third-tier cities exceeded that of first-tier cities for the first time, and the willingness to purchase in non-restricted areas was strengthened. In October 2021, the sales volume of new energy vehicles in non-restricted areas has reached 73.9%. In terms of levels, the sales of A00-class and B-class vehicles have increased significantly, showing polarization, and the consumption prospects of new energy vehicles with low-end transportation and high-end technology advantages are broad. By user, the purchase of private new energy vehicles has increased significantly. From January to July 2021, the proportion of private purchases of new energy vehicles increased to 77%, an increase of 12.7 percentage points compared with 2019.
Fourth, the acceptance of new energy vehicles by the people continues to increase.
At present, China's new energy vehicles can better meet people's daily travel, and it is expected to further replace fuel vehicles in the future. According to Iresearch's research, the main reason why consumers buy new energy vehicles is to agree with the concept of environmental protection and energy saving, although new energy vehicles are still in the process of imperfection, but they can meet the needs of consumers to and from work.
The top ten reasons for Chinese users to buy new energy vehicles in 2020 are: first, they agree with the concept of new energy, energy conservation and environmental protection (52%); second, the low cost of using cars (46.4%); third, tax reductions and price subsidies (45.4%); fourth, the pursuit of science and technology and intelligent configuration (43.9%); fifth, try new things (33.8%); sixth, there is a demand for car purchase, but there is no fuel vehicle license (32.5%); seventh, unlimited travel (27.2%) Eight is to follow the trend (26.4%); nine is the noise in the car (24.8%); ten is other (0.9%). It can be seen from this that the recognition of environmental protection concepts and price factors is the main reason why consumers choose new energy vehicles.
From the perspective of main uses, 73.6% of consumers choose to commute to work; about 80% of users often use cars in urban areas, and only about 20% of users use long-distance cars across provinces. At the same time, the average mileage of a single car is mainly concentrated in 10 to 40 kilometers. It can be seen that although new energy vehicles have problems such as battery life and charging facilities to be further strengthened, they can still meet people's daily commuting needs, which is in line with China's national conditions and is expected to further replace fuel vehicles.
Fifth, automotive intelligence will develop in tandem with electrification.
Overall, the development of vehicle electrification in mainland China has been relatively mature, and the sales penetration rate of new energy vehicles has changed from 1% to nearly 20% under the guidance of policies, and the qualitative change of the industry from 0 to 1 has been completed. It is worth noting that the current new phenomenon is that the importance of software in car performance is changing from quantitative to qualitative. If the development of traditional cars is only the continuous improvement of automotive hardware, then today, in the case of different brands and different models of foreign car companies, the impact of software on consumer driving experience will become the biggest variable.
In the future, automotive intelligence will become the focus of development for two main reasons: First, technological progress. In the era of the Internet of Everything, the rise of the fourth industrial revolution represented by chip technology, artificial intelligence technology, Internet of Things technology, big data technology, etc., will greatly affect the development pattern of new energy vehicles in the future. The second is user demand, with the popularity of the Internet, users' demand for software-related performance experience is becoming more and more intense. It is hoped that in the near future, drivers and passengers will be released to a certain extent in the hands, feet and brains while the car is driving.
Therefore, the intelligent development of automobiles, that is, "software-defined cars" is the second half of this new energy vehicle revolution. It can be said that in the early stage of the development of new energy vehicles, electrification has provoked people's interest in the intelligence of automobiles and driven people's exploration of intelligence. In the later stage of the development of new energy vehicles, the embedding of software such as highly intelligent auxiliary driving and audio-visual entertainment of the vehicle itself will bring people a new driving experience, which in turn will continue to promote the comprehensive replacement of electric vehicles, and intelligence and electrification will develop in synergy, so that the car will eventually evolve into a mobile intelligent terminal.
Source of this article: Shanghai Securities News
Author: Ren Zeping, Liao Shiqi
WeChat Editor: Wang Yuan
Founded in 1991, Shanghai Securities News, sponsored by Xinhua News Agency, and legally disclosed securities market information media by the China Securities Regulatory Commission, is the first national financial daily newspaper in New China to provide authoritative financial and securities professional information, and has now formed an all-media financial media matrix covering newspapers, websites, clients, videos, WeChat, Weibo and other platforms.
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