GGII believes that in the context of the gradual standardization of the development of the industry, compared with new energy vehicles, the four-wheel low-speed electric vehicle market with greater cost advantages still has its own space.
Low-speed electric vehicles generally refer to this type of vehicle with low driving speed, short mileage, and safety technology performance that does not meet the current electric vehicle standards, which is not included in the legal means of transportation, nor is it in the Ministry of Industry and Information Technology's "Announcement of Vehicle Manufacturers and Products", and in the early stage of industry development, some enterprises do not even have production qualifications.
The appearance of low-speed electric vehicles is similar to that of cars, although it is not as fast as cars and has a high mileage, but due to low prices, low cost of use, and the need for license plates, low-speed cars have become hot models in low-tier cities, townships and rural markets in recent years, and the market size continues to expand.
However, the industry has been in a disorderly development stage, and there are huge security risks. Low entry thresholds for low-speed vehicles, uneven product quality and technical level, fierce price competition, no clear policies and regulations in the right of way, insurance, and license plates, weak supervision, random parking and other phenomena are common, resulting in frequent safety accidents and victims not getting corresponding protection.
According to data from the Ministry of Industry and Information Technology, 830,000 low-speed electric vehicle traffic accidents occurred across the country from 2012 to 2017, resulting in 18,000 deaths and 186,000 injuries.
In order to regulate the development of the low-speed electric vehicle market, the state has successively introduced a series of national standards and policies, and in 2016, the State Council issued a directive agreeing to the work idea of "upgrading a batch, standardizing a batch, and eliminating a batch" of low-speed electric vehicles.
"Upgrading a batch" is to support compliant low-speed electric vehicle production enterprises to upgrade to conventional pure electric passenger car production enterprises in accordance with the management regulations of new pure electric passenger car enterprises, and guide the upgrading and transformation of the low-speed electric vehicle industry; "standardize a batch" clarifies the safety technical performance that low-speed electric vehicle products should meet, establishes and improves the market access and supervision system for low-speed electric vehicles, and corresponding use management measures to solve the problem of disorderly production and use of low-speed electric vehicles, and guides the rational development of the low-speed electric vehicle industry; "eliminate a batch" It is to carry out centralized rectification work, resolutely ban and eliminate low-speed electric vehicle manufacturers and products that do not meet the requirements in accordance with laws and regulations.
However, this management model has not effectively improved the chaos in the industry, and the "upgraded" enterprises have entered the new energy vehicle market, but they are still engaged in the production and sales of low-speed electric vehicles, and even the main business of some enterprises is still low-speed electric vehicles; there are still product quality problems in enterprises after "standardization"; "eliminated" enterprises also have the phenomenon of re-participating in industry competition. The industry urgently needs to further guide the norms and get on the right track.
In March 2021, the minutes of the meeting on the formulation of low-speed electric vehicle standards led by the Ministry of Industry and Information Technology were released; in June, the Ministry of Industry and Information Technology officially solicited opinions on the recommended national standard "Technical Conditions for Pure Electric Passenger Vehicles" and put forward specific requirements for the relevant technical indicators of this category; in August, the public opinions on the national standard for low-speed electric vehicles were completed, and the formal standards are expected to be officially introduced in October and November.
Policy progress in the low-speed electric vehicle industry
Source: Compiled by the Lithium Battery Research Institute (GGII), December 2021
In the 2021 edition of the Technical Conditions for Pure Electric Passenger Vehicles (Draft for Comments), four-wheeled low-speed electric vehicles were renamed as "miniature low-speed pure electric passenger cars", defined as "pure electric passenger cars with 4 seats and less and a maximum speed of less than 70 km/h".
The document adds the technical requirements for micro low-speed pure electric passenger cars, including the outer dimensions, vehicle armament quality, tires, electrical safety, overspeed restrictions, braking performance, stability, power performance, reliability requirements, micro low-speed pure electric passenger cars are broadly pure electric passenger cars, but have their own characteristics such as low speed, miniaturization, and lightweight.
In the "Technical Conditions for Pure Electric Passenger Cars" (Draft for Comments), the higher standard threshold for low-speed vehicles has triggered discussions in the industry. During the two sessions in 2022, after some npc deputies put forward new proposals that are more operational and easier to land, the standard threshold for low-speed cars may be shelved or even re-solicited for comments, and new standards and new terms will be reformulated, which is undoubtedly a huge positive for low-speed cars.
From the performance of the electric low-speed vehicle market, in 2016, the national four-wheel low-speed electric vehicle production exceeded the million mark, at 1.169 million units, and in 2017, due to the impact of unclear policies such as the national standard draft, the growth rate slowed down to 1.335 million units, of which Shandong Province produced 756,000 units. Affected by the industry's clean-up and rectification policy, the production scale of four-wheel low-speed electric vehicles began to shrink in 2018, reaching about 1.233 million units, and low-speed car sales declined for the first time.
In 2019, affected by the clean-up and rectification, a large number of enterprises stopped production and rectified, and the output of low-speed vehicles was less than half of the previous year, at 850,000 units. In 2020, in the environment of mini car fires such as Wuling Hongguang Mini, the market environment for low-speed cars will be more severe, and production will further decline to 710,000 units, affected by policies and market prosperity, the industry output will be about 320,000 units in 2021.
2013-2021 China's electric low-speed vehicle production and growth rate (unit: 10,000 units, %)
Source: Lithium Battery Research Institute (GGII), December 2021
At present, the leaders of the four-wheel low-speed electric vehicle market mainly include Reading, Hongri, Hantang, Yujie, Dayang and so on. Since the second half of 2018, low-speed car companies have carried out self-help, enterprises with technical conditions have begun to transform into high-speed car business, through mergers and acquisitions of traditional car companies, application for production qualifications, cooperation with traditional car companies, etc., has obtained the relevant production qualifications of national passenger cars and commercial vehicles; some enterprises with weaker conditions have begun to carry out business transformation and switch to electric motorcycles. In the future, the introduction of new standards will put forward higher requirements for the production qualifications of low-speed car enterprises, which will further accelerate the transformation process of low-speed car enterprises, and at the same time, many enterprises face the risk of elimination.
Under the trend of new standards, what is the market outlook for four-wheeled low-speed vehicles. GGII believes that in the context of the gradual standardization of the development of the industry, compared with new energy vehicles, the four-wheel low-speed electric vehicle market with greater cost advantages still has its own space.
In order to comprehensively and deeply understand the development status and trend of the four-wheel low-speed electric vehicle industry, GGII has collected a large amount of first-hand information through the field investigation of the main four-wheel low-speed electric vehicle manufacturers and supporting enterprises in the country, combined with the face-to-face interviews of the leaders of the four-wheel low-speed electric vehicle industry, so as to write the "2022 Electric Low-speed Vehicle Industry Research Report". This report will conduct a comprehensive analysis from multiple perspectives such as policy, market demand, upstream supply, and competitive environment.