Written by / Han Ling
Edited / Mao Shiyang
The price of points plummeted, "forcing death" cheap electric vehicles
"A drop in the price of 'double integrals' is not necessarily a bad thing. The purpose of double credits is actually to encourage enterprises to do new energy vehicles, rather than to let enterprises get development through points trading. On March 17, Shi Jianhua, deputy secretary-general of the China Association of Automobile Manufacturers, told Caijing Tianxia Weekly.
"Finance and Economics" Weekly learned that the transaction price of new energy points in 2020 is about 1,000 yuan / min, and in 2021, it will rise to about 2,000 yuan / min, and this year's points transaction price has returned to the level of 2020. In just a few months, the transaction price of new energy points has been cut, and some transaction prices have dropped to 500-800 yuan / cent.
The reason why car companies pay so much attention to the price of points is related to the implementation of the "double points policy" for nearly 5 years. In order to allow passenger car companies to produce models with lower fuel consumption and tilt their products towards new energy vehicles, the Ministry of Industry and Information Technology issued a "dual credit policy" in September 2017, including consumption points (CAFC points) and new energy points (NEV points).
In general, car companies obtain tradable new energy credits through the production of new energy vehicles, while car companies that are mainly fuel vehicles and high-energy-consuming models need to purchase points in the market to offset the "negative points" brought by their products.
However, some new energy vehicle companies can't sit still. In fact, the new energy points transaction to the traditional fuel vehicle companies caused great pressure at the same time, but also for the new energy vehicle companies to bring a way to increase profits, and since last year, the high number of new energy points to spawn a large number of low-cost new energy products, many products themselves gross profit is negative, need to rely on new energy credits trading to turn positive.
In 2020, SAIC-GM-Wuling reached the standard of "double integral" for the first time and obtained the 443141 of new energy credits. In 2019, the average fuel consumption score of SAIC-GM-Wuling was -184868, and the credit of new energy vehicles was 101759, which is a typical car company that does not meet the standard of "double integration".
Behind this, SAIC-GM-Wuling launched the Hongguang MINI EV in July 2020, with a cumulative sales of 120,000 vehicles that year, and the cost of this micro-electric vehicle has reached about 20,000 yuan, in the state of "the more it sells, the more it loses", but Wuling still continues to launch new models. Relying on points trading, the new energy credits brought by Wuling Hongguang MINI EV in 2020 are expected to bring nearly 1.3 billion yuan in revenue to SAIC-GM-Wuling.
Zhu Jun, deputy director of SAIC Motor Technology Center and general manager of Jieneng Company, once revealed that the original intention of SAIC-GM-Wuling to launch pure electric cars was to meet the requirements of the "double integral" policy. Zhu Jun explained that because the contribution of large cars and small cars in points is the same, the car will usher in explosive growth. Wuling Hongguang MINI EV this car will greatly help enterprises to meet the standards under the existing policy system. Otherwise, the business needs to spend a lot of money to buy points.
As Zhu Jun predicted, 2021 will be a year of surge in the number of low-cost, small-scale new energy vehicle products. The success of the Hongguang MINI EV has made a number of traditional car companies start the idea of mini cars. Changan's Ben E-Star is the main sales force of Changan New Energy, with more than 70,000 vehicles accumulated in sales in 2021, and Chery QQ Ice Cream and Dongfeng Fengguang's miniEV also entered this field with this strategy.
In addition, Nezha, who currently ranks fourth and fifth in the new car, also has one or more new energy main sales products priced at less than 80,000 yuan.
With the decline in the price of points, some low-priced products have begun to show signs of withdrawal. Zhu Huarong, chairman of Changan Automobile, also said that due to the failure of the double integral to meet the standard, Changan's bicycle profit was 4,000 yuan less. Judging from the 2021 financial report, the net profit of Changan Automobile bicycle is only 1600 yuan.
Recently, Dong Yudong, CEO of Great Wall Motor's Euler brand, expressed concern about the decline in the price of points in the future, "If the sales of new energy vehicles this year reach 4.2 million or higher, the value of points will become lower and lower, and it may become 200 yuan per cent." Prior to this, the production of two low-priced products of Great Wall Euler, black cat and white cat, was suspended.
"The fluctuating price of points is still quite large, which causes some pressure on the operation of enterprises." A few days ago, Fang Yunzhou, founder and chairman of Nezha Automobile, publicly stated that "it is necessary to form a pool of points and maintain a stable balance in the price of points." ”
Some rejoice and some are worried
The low transaction price of new energy points has made some passenger car companies breathe a sigh of relief, and some new energy vehicle companies cannot sit still.
Taking the latest statistics released by the Ministry of Industry and Information Technology in 2021 as an example, FAW-Volkswagen's new energy credits in 2020 are less than -139,000 points, SAIC Volkswagen is close to -93,000 points, GAC Honda and SAIC-GM's points are also below -80,000, and geely, the "independent brother" Geely, is less than -60,000 points. According to the transaction price of nearly 2,000 yuan / min in the first half of 2021, FAW-Volkswagen will need to spend about 280 million yuan to purchase new energy credits, and car companies such as Guangqi Honda and SAIC-GM will also need to spend more than 160 million yuan.
In actual transactions, car companies may spend more on purchasing points. Previously, it was reported that FAW-Volkswagen bought it from Tesla at a price of 3,000 yuan per cent in order to consume 1.32 million negative points in 2020.
If the price of points continues to remain low, the above-mentioned traditional car companies are expected to save more than 100 million yuan in 2022.
But for new car manufacturers who have not yet achieved profitability, the decline in the price of points is under pressure.
In 2021, Nezha Automobile delivered a total of 69,674 vehicles, an increase of 362% year-on-year. In 2018, 2019 and 2020, this data is still 1,000 units, 11,000 units and 15,000 units, respectively. In 2022, Nezha said that it would hit the sales target of more than 150,000. The sharp increase in sales means that Nezha has more new energy credits that can be traded, and there is more room for profit. If the new energy credits fall sharply this year, then Nezha's revenue available for trading will be significantly less.
According to the "2020 Announcement on the Average Fuel Consumption of Chinese Passenger Car Enterprises and New Energy Vehicle Credits" issued by the Ministry of Industry and Information Technology in July last year, the number of points that Nezha Automobile can use for points trading is 80,461 points, and if it is calculated at a price of 2,000 yuan per cent, then Nezha Automobile can probably get 160 million yuan in revenue.
It should be known that most of the new energy car-making enterprises are in the loss, and the low pricing of Nezha's cancellation products limits the profits of bicycles, and an additional income of up to 160 million yuan is very impressive.
In addition, in NIO's third quarter 2021 financial report, NIO's other sales revenue was 517 million yuan. "Other sales revenue" is from the double points sales revenue, the relevant financial person in charge said that Weilai sold about 200,000 points in the third quarter of this year, which shows that last year, Weilai's single point price has exceeded 2500 yuan. Undoubtedly, this is an important source of income for WEILAI.
"After excluding points revenue, the gross margin of other sales revenue actually slipped from -5.6% to -12.6%." Qu Yu, vice president of finance of WEILAI, said. In addition, Ideal Auto's financial report shows that it sold about 70,000 new energy credits in the 2021 trading year, with revenue of 200 million yuan.
Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, believes that double integration was an important source of profit for new energy automobile enterprises before, but now because the price of double integration is relatively low, the profit of new energy vehicles will be affected. However, from the perspective of encouraging the development of new energy vehicles, medium- and long-term sustainable policies should be considered.
Tesla made a total profit of $1.58 billion through the sale of points in 2020, and the company's net profit for the year was only $721 million, which means that without such points gains, Tesla would have a net loss in 2020 through car sales alone.
This year, the Ministry of Industry and Information Technology has not yet announced the double point accounting situation in 2021. However, according to Cui Dongshu's calculations, Tesla is still ranked first, and in 2021, it will receive 1.58 million 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.
Not long ago, Fang Yunzhou just put forward a proposal on stabilizing the price of double integrals at the "two sessions". Fang Yunzhou revealed that he proposed in the proposal to ensure that the new energy credit is stable at more than 2,000 yuan / point.
Is "selling points" a good business?
In fact, the reason why the price of new energy credits has plunged sharply this year is related to the high sales of new energy vehicles and the low sales of fuel vehicles last year.
Statistics show that in 2021, the retail sales of new energy passenger cars in China reached 2.989 million units, an increase of 169.1% year-on-year. According to the data of the National Passenger Vehicle Information Joint Association, the new energy credits will reach 8.43 million points in 2021, an increase of 3 million points from 5.42 million points in 2020. At the same time, the China Automobile Association expects that China's new energy vehicle sales will reach 5 million in 2022, an increase of 47% year-on-year. This means that the price of new energy credits is likely to fall further.
In Shi Jianhua's view, the decline of points with the market is not a bad thing.
Shi Jianhua explained to the "Finance and Economics" Weekly that the price of points is affected by the regulation of market demand, and from the perspective of developing new energy vehicles, it is not that the more expensive the point price, the better. If the company relies on the sale of points to support the expected new energy industry, to some extent, the sustainable development of the company itself is somewhat problematic.
In fact, more car companies have begun to rely on low-cost new energy vehicles. Among the new car manufacturing forces, Nezha Automobile's mid-to-high-end product Nezha S will be unveiled during the Beijing Auto Show in April, and then prepared to be listed in the third quarter of this year. To this end, Nezha created a shanhai platform, hoping to improve the speed of launch of new products and begin to move towards the high-end market.
Cui Dongshu, secretary general of the Federation of Passenger Vehicles, believes that although the sales of new energy passenger vehicles in 2021 increased by twice as much as the year-on-year, the total positive points of new energy vehicles of 8.43 million points only increased by 56% year-on-year, which also led to greater pressure on the new energy vehicle points of individual car companies.
But now, with the decline in the price of points, this strategy of small profits and high sales can no longer meet the demand for points from car companies, in other words, it is more difficult for car companies to obtain new energy points.
In fact, the double-credit new policy proposes that the proportion of new energy vehicle credit assessment in 2021-2023 is 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 points assessment standard has been raised, and the difficulty of car companies obtaining positive new energy points is also increasing.
Another policy change is the modification of the calculation method for the credits of new energy passenger vehicles. Previous points were mainly judged based on the mileage, and electric vehicles that reached a mileage of 100 kilometers in previous years could get 2 points. So for a long time, car companies have poured into micro-electric vehicles.
But now, it is difficult to solve the double point gap problem by selling cars alone. According to the newly revised policy, the maximum number of 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 (PHEV) will be reduced by 20% from the previous 2 points to 1.6 points.
This has a greater impact on those companies that are mainly based on cars, especially Wuling Hongguang MINIEV. For example, in 2020, the Hongguang MINIEV with a 120km endurance can get 2 points / car points, but now it can only get 0.75 points / car. Plug-in hybrids are relatively small, and the new policy is good for bystanders like BYD or other traditional car companies, whose groups have a certain percentage of plug-in hybrid models.
"The new policy integrates factors such as the endurance level of the whole vehicle and the level of power consumption of the whole vehicle, so that the points that can be obtained by the original car are greatly reduced, and there are further growth requirements for the number of new energy vehicles, which does increase the difficulty of traditional car companies to get new energy credits." Cui Dongshu told caijing weekly.
In addition, this year, the Ministry of Industry and Information Technology issued a new measurement standard, which stipulates that traditional fuel vehicles and plug-in hybrid models will use WLTC working conditions that are more in line with actual use conditions to test fuel consumption and power consumption in the future. After the adoption of the WLTC standard, the point assessment faced by both fuel vehicles and new energy vehicles will be more stringent.
Because the WLTC working conditions are more practical than the previous NEDC test standards, close to the daily car scene, in this case, the measured fuel consumption data may be increased, while the pure electric mileage of new energy vehicles is lower.
Cui Dongshu told the "Finance and Economics World" weekly that the gradual improvement of assessment standards has brought a gradual improvement to car companies, but in general, the pressure of new energy points of car companies will not be too large, which gives more car companies time to prepare.
In the past, traditional car companies only spent a lot of money to buy new energy points from the hands of new energy car companies, and now the price of points has declined, and the dividends of new energy car companies have "disappeared", although traditional car companies pay less for buying points, but it is more difficult for them to obtain new energy points.
Industry insiders pointed out that with the further increase in the penetration of new energy vehicles, plus traditional car companies are also accelerating the enrichment of pure electric model products, the future car companies for new energy vehicles points demand is not as strong as imagined, relying on points to "make money", is not a long-term business model.