Tan Xuguang, chairman of Weichai Power: There will be a catastrophic overcapacity of new energy vehicles

On April 1, Weichai Power held the 2021 annual results conference, and Tan Xuguang, chairman and CEO of Weichai Group, answered questions that investors are concerned about, such as the international situation, industry development trends, company operations and future strategies.

As an important engine manufacturer in China, Tan Xuguang expressed his views on the industry and the development of new energy. Among them, he pointed out that new energy vehicles will have a catastrophic overcapacity. Weichai Power is developing and laying out hydrogen fuel cells in the field of new energy.

01

Bluntly speaking, new energy vehicles will have overcapacity

Tan Xuguang said that there are many uncertainties in the current external environment, including economic downturn, sudden Russian-Ukrainian conflicts, etc., affecting the supply chain links including chips, which may have a greater impact on vehicle companies. However, he believes that the impact on engine companies is not very large.

Tan Xuguang believes that for Weichai, external influences have advantages and disadvantages, Weichai Power's current business growth overseas, especially in Europe and the United States is very rapid, and the demand for product exports is very large.

● According to Weichai Power's annual report, in 2021, it achieved operating income of 203.55 billion yuan, an increase of 3.2% year-on-year, net profit of 9.25 billion yuan, an increase of 0.3% year-on-year, and operating cash flow of 14.658 billion yuan, down 36.25% year-on-year.

At present, Weichai Power's main business has 4 major blocks, namely power system business, commercial vehicle business, intelligent logistics business, as well as new formats, new energy, and new technology sectors.

At present, new energy vehicles are developing rapidly and are also highly concerned by all walks of life. As a traditional powertrain manufacturer, Weichai Power has also begun to get involved in new energy fields such as hydrogen energy. On the day of the performance briefing, Tan Xuguang was also asked about the topic of new energy.

"Double carbon, including new energy, cannot be divorced from reality, rush to achieve results, engage in sports carbon reduction, and step on the brakes." Tan Xuguang said that in recent years, the new energy industry has been more lively, there has been a "rush of swarms", and then disorderly competition, new energy vehicles, especially passenger cars, will have a catastrophic overcapacity.

He also said that there are many companies involved in private activities, inflating wealth through the capital market, resulting in disorderly capital expansion of new energy in the capital market.

In Tan Xuguang's view, fossil energy cannot be replaced in a short period of time on commercial vehicles, especially heavy commercial vehicles, non-road (construction machinery), ship power, and agricultural equipment. At the same time, the arrival of new energy has brought the impetus for scientific and technological progress to traditional energy, and reducing fuel consumption and improving efficiency are important means to realize the power of traditional fossil energy and extend life.

"The energy structure is a diversified combination, which is the direction of the future, in different countries, different regions, according to local conditions, will form different energy combinations." For example, in the Middle East, it is not certain whether they will replace fossil energy with new energy. Tan Xuguang also believes that power batteries also have limitations, including charging, sources and raw material supply, and call on the outside world to rationally look at the changes in the current energy structure of energy.

02

Weichai lays out the field of hydrogen fuel cells

At the performance briefing, Tan Xuguang introduced Weichai Power's exploration in the field of new energy.

Tan Xuguang introduced that Weichai preemptively laid out in the fuel cell industry chain, weichai power has invested in the United Kingdom's Syris, Canada's Ballard, Germany's Odds, etc., to build a "battery + motor + electronic control" as one of the new energy powertrain. Weichai Power has strategically joined hands with The Swiss Flying Group and laid out the fuel cell air compressor business in China. So far, Weichai Power layout reserves a series of key components such as battery stacks, motors, electronic controls, bipolar plates, air compressors, etc., and has the research and development and production capacity of new energy powertrains and core components.

● At the same time, Weichai is also the only company that has a fuel cell product that truly operates for 30,000 kilometers and has no energy attenuation. So far, Weichai is the world's only fuel cell company with the largest production capacity, reaching 20,000 units. In terms of technology research and development, Weichai Power is the only license holder of the mainland fuel cell technology innovation center, and in the future, Weichai will also undertake the research and development of a series of major national projects", Tan Xuguang pointed out after listing a series of achievements of Weichai, "These big moves are about Weichai's fuel cell industry chain layout in the next 5, 10 or even 20 years." ”

At the meeting, some analysts asked how to view the industry trend and rhythm of commercial vehicle intelligence.

Tan Xuguang said that assisted driving is achievable in specific environments, such as closed scenes such as ports and mines. But driverless driving is not so simple and requires huge costs. "I think the first scenario to use assisted driving may be the mine card, which can reduce the number of mine card drivers by 1/3 and reduce personnel costs." In addition, the most promising scenario for using assisted driving is agricultural machinery, in the three eastern provinces, smart agriculture will take the lead in using heavy trucks to assist driving, unmanned driving is currently impossible. ”

In addition, Tan Xuguang revealed that Weichai engine exports will be about 35,000 units in 2021, an increase of 50% to 60%. It will double in 2022 to 80,000 to 100,000 units. This will bring new changes to the export pattern of medium and large diesel engines in the world. In particular, in the first quarter of the year of 2022, Sinotruk's export orders remained above 6,000 units per month. The reason for this achievement is that the export of heavy trucks and heavy engines is closely related to the increase in energy prices, the contradiction between supply and demand, and the increase in demand for heavy machinery brought about by large-scale mining.

Tan Xuguang predicted that in the future, the export value of Weichai Group's domestic business is expected to account for 8 to 10% of sales, and the export value of domestic business is expected to reach 15 to 20% within two years.

(Editor-in-charge: Zhang Qianye)

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