On March 25-27, 2022, the 8th China Electric Vehicle 100 Forum with the theme of "Greeting a New Stage of Market-oriented Development of New Energy Vehicles" was held online, and a total of 14 meetings were held to focus on industry hotspots and explore development trends.
On March 26, Wang Chuanfu, chairman and president of BYD Co., Ltd., delivered a speech with the theme of "Thinking of Danger in Times, Pragmatic and Enterprising, and Promoting the Marketization of New Energy Vehicles to Achieve Stability and Long-term Development" at the 100-person forum. The full text of the speech is as follows:
"Thinking of Danger in Times of Peace, Pragmatic and Enterprising, Promoting the Marketization of New Energy Vehicles"
Chairman and President of BYD Co., Ltd. Wang Chuanfu
March 26, 2022 Beijing
In the past year, with the accelerated evolution of the world's century-old changes and the century-old changes in automobiles, the double carbon target has been superimposed, and new energy vehicles have ushered in the industry outlet and achieved explosive growth. On July 30 last year, General Secretary Xi Jinping called for "supporting the accelerated development of new energy vehicles" at a meeting of the Politburo of the Central Committee, raising new energy vehicles to an unprecedented height of national development. This year, the mainland automotive industry struggled hard, resisted the pressure, firmly embraced the electrification reform, ended the three consecutive years of decline, and achieved a good start in the "14th Five-Year Plan". New energy vehicles have exploded with huge energy, becoming the "top pillar" for the transformation of new and old kinetic energy in the industry and the promotion of consumption. It can be said that last year was the first year of China's new energy vehicle development, and the industry entered a new stage of market-oriented development and achieved a milestone leap. This is the result of continuous cultivation and continuous innovation of all colleagues in the industry in the past ten years.
In the past year, BYD with subversive technologies such as blade batteries, DM-i super hybrid, and e-platform 3.0, adhered to the "two legs" of pure electric and plug-in hybrid walking, ushered in the outbreak of technology, products and markets, and sold 740,000 vehicles throughout the year, including new energy vehicles exceeded 600,000 units, an increase of 220% year-on-year, ranking first in China for 9 consecutive years, achieving a large development of thick accumulation. This year, BYD continued to take advantage of the momentum, with sales of new energy vehicles exceeding 180,000 units from January to February, a five-fold increase year-on-year. In January, BYD won the first place in the world's single-month sales of new energy vehicles; in February, in the monthly list of domestic passenger cars, BYD ranked among the top two in the country for the first time, achieving a good start! Behind the beautiful growth curve is BYD's adherence to the green dream and its dedication to technological innovation for 20 years. Here, I would like to thank all the leaders, industry colleagues, consumers and all sectors of society for their companionship and strong support!
Last year, the development of new energy vehicles exceeded expectations, and the speed of industry change in the future may be faster than imagined. On the one hand, there are more and more positive factors to promote the accelerated development of new energy vehicles at the level of technology, products, markets, policies and other levels; on the other hand, there are more and more negative factors restricting fuel vehicles due to rising oil prices, emission upgrades, energy conservation and environmental protection, and industrial transformation. The development of new things has never been equal in proportion, from black-and-white television to color television, from feature phones to smart phones, that is, in just a few years, the transformation has been completed, and the speed and efficiency of new things in the Chinese market are faster than foreign countries. With the rapid iterative progress of technology and products, new energy vehicles have surpassed traditional fuel vehicles in terms of performance, modeling, noise, acceleration, smoothness, intelligence, and cost of use, and the price has begun to have a certain competitiveness, and the endogenous drive has continued to increase.
The penetration rate of new energy vehicles in the mainland increased by an average of 1.3 percentage points per month from 6% in January at the beginning of last year to 22% in December at the end of the year. The penetration rate in the first half of March this year has exceeded 28%, and it is estimated that the penetration rate for the whole month will exceed 28%. Last year's wave of growth is different from 3 years ago, when online car-hailing and taxis accounted for a large proportion, but last year, private cars accounted for up to 88%, and it was the people who supported the purchase of new energy vehicles with practical actions. Of course, we also see that new energy vehicles are different from home appliances, mobile phones and other industries, in addition to market-driven, there are also policy-driven and national strategic orientation. If ten years ago, the development of new energy vehicles was mainly driven by policies; 3 or 5 years ago, the development of the industry was a two-wheel drive of "policy + market", then the current market drive accounted for 70%, and the policy drive was 30%. We did a test, at the local auto show, with 5 days to observe the scene of people's car watching behavior, we found that 60% to 70% of consumers are looking at new energy vehicles, and only 30% to 40% of consumers looking at fuel vehicles, this data makes us very shocked, but we can clearly see that when the people buy cars, most people are looking at new energy vehicles, which is the direct reason for the increase in the penetration rate of new energy vehicles month by month. According to the speed of industry change last year, if it is a constant speed calculation, at the end of this year, it is expected that the penetration rate of new energy vehicles in the mainland will reach 35%.
From a global perspective, it is a global consensus to deal with climate change and achieve carbon peaking and carbon neutrality. Especially in the past three years in Europe, the development of new energy vehicles by leaps and bounds, last December, Iceland has achieved full electrification of new cars, Norway has reached a penetration rate of 90%, the Netherlands, Sweden penetration rate has exceeded 60%, even the most developed traditional car power - Germany's penetration rate has exceeded 35%, which represents the general trend of electrification to accelerate change. In the current international environment, oil prices have risen sharply, and the reform of new energy vehicles will accelerate. The mainland relies on imports for 70% of its oil, 70% of its imports pass through the Strait of Malacca, and 70% of its oil is used in the automotive industry. The mainland is more urgent than any other country to reduce its dependence on oil, and the replacement of fuel vehicles by new energy vehicles will only be fast, not slow. We have all gone through the process of electrification of public transport, and the more we end up, the faster the speed of change is beyond imagination, and the same is true for private cars.
Of course, we are also soberly aware that behind the explosive growth of the market, the industry is facing severe challenges such as the intensification of the epidemic, the soaring price of raw materials, and the instability of the supply chain. This year is a key year for new energy vehicles to take advantage of the momentum and accelerate change. The more the industry grows at a high speed, the more it is necessary to think of danger in times of peace, seek progress in stability, take into account various complex factors, and adhere to technological innovation to solve the problems of development. Finally, a few suggestions and ideas:
First, we hope to clarify the preferential policies for new energy vehicles in the post-subsidy era.
From a worldwide perspective, European and American countries are increasing their fiscal and tax support for new energy vehicles, but the mainland's new energy vehicle purchase subsidies, purchase tax reductions and other policies will be withdrawn by the end of this year. Considering that product development takes 3 to 5 years, in order to stabilize industry expectations, it is recommended that the purchase tax reduction policy for new energy vehicles can be extended to maintain policy stability during the "14th Five-Year Plan" period. At the same time, last year's new energy vehicle sales reached a new high, the supply and demand of points is seriously imbalanced, the price fluctuates sharply, which is not conducive to the development of the industry, it is recommended to refer to the grain reserve adjustment mechanism of agriculture, study and set up an integral pool to adjust the balance between supply and demand, enhance the predictability of the integral price, and ensure the effective operation of the double integral policy.
Second, insist on pure electric and plug-in hybrid "two legs" to walk.
Last year, plug-in hybrids had a 50 percent share of the European market, but only 18 percent in China. More than 60% of China's families are still car-free households, plug-in hybrid to achieve short-distance electricity, long-distance oil, so that the first family car can be oilable and electric. At present, there are more and more plug-in hybrid products on the market. If pure electric vehicles focus on solving the need for additional purchases, then plug-in hybrid effectively solves the demand for first purchase and replacement of more families, and forms a significant substitution effect on the huge stock fuel vehicle market. Plug-in hybrid is an important path to achieve the goal of double carbon, and the change is relatively mild, which will help stabilize the industrial chain supply chain and achieve a smooth transition from fuel vehicles to pure electric vehicles.
Third, adhere to lithium iron phosphate as the right development path.
Safety is the cornerstone of the development of new energy vehicles, cost is an important indicator that must be faced, when the performance crosses a certain threshold, the importance of energy density is decreasing. In the past, when the mileage of electric vehicles was 200 kilometers, energy density was the most important indicator; but when the mileage reached 500 kilometers, the same mileage as a tank of fuel oil in fuel vehicles, battery energy density is no longer the most important, and the most important indicators may become safety, cost, cycle life, etc. BYD launched a blade battery to solve safety pain points, realize that the energy density of the package is comparable to that of ternary batteries, and the cycle life and safety factor are stronger, and the lithium iron phosphate is pulled back to the right path of the industry. At the same time, China cannot change from the era of fuel vehicles being necked by oil cards to being necked by metal cobalt and metal nickel in the era of electric vehicles. Lithium iron phosphate does not contain rare metals and is more suitable for the tolerance of social resources.
In addition, the soaring price of raw materials is a challenge that the industry needs to overcome. We also recommend comprehensively sorting out the layout and production capacity of lithium carbonate resources, increasing domestic mining and foreign imports, maintaining market supply and demand, stabilizing price expectations, and promoting the healthy and safe development of the industry.
At the two sessions of the National People's Congress, Premier Li Keqiang clearly pointed out in the government work report that "continue to support the consumption of new energy vehicles". During the period of great change, innovative technology, accurate strategy and flexible decision-making are needed, and BYD will work together with its peers to promote better and faster development of new energy vehicles from independent innovation to comprehensive open innovation!