In March, the auto market did not usher in a warm sun. According to the Passenger Association, the overall domestic automobile sales in January-February fell by nearly 20% year-on-year. From the perspective of different market segments, the development of fuel vehicles and new energy markets has continued the pattern of tragedy and joy in recent years, one is the deep chill of the fuel vehicle market, and sales have fallen by 30% year-on-year; One is the vitality of the new energy vehicle market, up 24% year-on-year. Therefore, a long-standing proposition was put forward again, fuel vehicles, this is to be completely finished.
First of all, the answer is that new energy vehicles are the future, but the replacement of fuel vehicles is not overnight. In the short term (such as the next 3 years) electric vehicles will still grow rapidly, but then will experience a period of stable development, during which the relative share of the electric vehicle and fuel vehicle market will maintain a roughly stable proportion, the length of time depends on the maturity of battery technology, plug-in hybrid will usher in a 10-year development window.
What is the driving force of new energy vehicles?
The latest sales data shows that in January 2023, BYD and Tesla were far ahead in the global new energy vehicle sales ranking, reaching 140,000 and 100,000 units, respectively, while BMW, which ranked third, sold less than 30,000 electric vehicles. Looking ahead, global sales of new energy vehicles in 2022 will be 10.65 million units, of which 63% of sales will occur in China. I can't help but ask, what is the driving force?
First, the role of policy is unquestionable.
In 2009, the Ministry of Finance, the National Development and Reform Commission and other departments jointly launched the "Ten Cities and Thousand Vehicles Project", which plans to develop 10 cities every year in three years, and each city will launch 1,000 new energy vehicles for demonstration operation, mainly involving urban public transportation and municipal services.
Since 2013, the policy has begun to tilt towards private car purchases. In addition to direct car purchase subsidies and purchase tax exemptions, the policies of first-tier cities are more targeted and attractive. Beijing has implemented a separate lottery for new energy vehicles and increased the quota proportion of new energy vehicle indicators year by year; Shanghai implements a free licensing policy for new energy vehicles; First-tier cities such as Guangzhou and Shenzhen have also supported new energy vehicles in terms of license plates and driving restrictions. The reason why it is attractive, taking 2015 as an example, the winning rate of Beijing passenger car lottery policy was less than 0.5%, and during the same period, the bidding price of Shanghai license plates has reached the order of 80,000 yuan.
If the promotion of policy is the catalyst for the "chemical reaction" of the market, the change in the mentality of the consumer as a market subject is the main reason. In early 2015, Chai Jing's "Smog Survey: Under the Dome" flooded social media, reflecting the general public's collective anxiety about environmental issues such as smog, and in fact, since 2013, smog has frequently plagued major cities such as Beijing. As a result, from authoritative official media to online public knowledge, they are all shouting for strengthening environmental protection, and the "concept that green water and green mountains are gold and silver mountains" proposed in the report of the 19th National Congress in 2017 is an echo of public opinion.
Of course, green environmental protection is only a preliminary psychological construction for consumers to buy new energy vehicles, and the more core is the fashion trend of electric vehicles brought by Tesla.
Tesla's first-generation Roadster, launched in 2008, was the world's first mass-produced all-electric sports car to use lithium-ion batteries, accelerating to just 3.7 seconds. More appealing are the first owners of Tesla, in the United States there are Hollywood celebrities (such as Little Plum), NBA stars (such as Curry) and countless Silicon Valley Internet upstarts; In China, there are many business elites and entertainment stars, including Yu Yongfu, chairman and CEO of UC UVision (who later became a director of Xpeng Motors), TV producer Wang Han, Li Xiang, president of Autohome (later founder of Li Auto), Xiaomi Lei Jun, Tony Leung, Han Han and so on.
The idol effect of celebrities has an immeasurable role in brand image building and brand pull, and Tesla's actual sales (see figure below) also support the popularity of the market, with compound annual growth rates of 83% in China and 99% in the world over the past 10 years.
Tesla's rapid sales in the past decade
Similar to the impact of Apple's 1 release on the mobile phone market in 2007, Tesla's emergence also stirred the car market and impacted the market pattern that had been calm like water for the past half century. In China, new forces represented by Wei Xiaoli have sprung up, and traditional automobile brands have successively launched their own new energy vehicle brands, so the supply of new energy vehicle products in the market has begun to become increasingly abundant, and consumers' choices have become diversified, which provides a guarantee for the further growth of the market.
Where are the obstacles for electric vehicles to replace fuel vehicles?
As a tool for travel, "travel as you like" is a universal vision, but there are still many shortcomings and potential development problems in realizing this vision.
The first is the problem of fewer charging piles. In 2022, the number of public charging infrastructure in mainland China will be 1.8 million, which is still small compared to the number of gas stations in China with 119,000. We slightly estimate that a gas station, an average of 6 gas guns (generally more than 6), each car refueling time of 5 minutes, based on this standard, the number of domestic public charging piles must reach the level of tens of millions, in order to be on par with gas stations in energy replenishment efficiency (119,000 * 6 * 24 = 12.85 million, assuming that each charge time is 1.5 hours). In addition, the uneven distribution of charging piles and insufficient maintenance are also one of the important problems found in practice.
Secondly, the development of battery technology is not mature enough. The immaturity of the power battery is manifested in several aspects, one is the cruising range, the other is the charging time, in fact, these two aspects of the problem, and the problem of less charging piles is actually closely related. At present, the nominal cruising range of electric vehicles is generally between 300-600 kilometers (the actual range varies from 8-9 discounts). Assuming that the cruising range generally reaches more than 1,000 kilometers, and the charging efficiency can achieve "charging for 5 minutes and driving 300 kilometers", the scale of the charging pile can be reduced accordingly. Another manifestation of the immaturity of battery technology is the adaptability to extreme environments, such as safety in severe collisions and use in extremely cold weather. The distribution of electric vehicle sales in China also supports this problem. China's electric vehicles show a clear structure of more south and less north, while the penetration rate of the three eastern provinces and western provinces is at the bottom of the country.
In addition, a stable power supply system is also an important obstacle to future development. The current penetration rate of new energy vehicles is only 1/4, and once electric vehicles are fully popularized, the demand for electricity will increase significantly. In particular, when China's electric vehicles are fully popularized, annual sales will reach a scale of about 20 million units (26.86 million vehicles in 2022), and in the next 10 years, it will soon reach 200 million units, based on the power of 70 kWh per vehicle, assuming that each vehicle is charged once a week, the power consumption of electric vehicles will account for 10% of the country's total power generation. Therefore, a stable power supply network will also be an important issue for the popularization of electric vehicles in the future.
For the replacement of fuel vehicles, there will be a relatively fixed steady-state structure in the future
China's automobile market is a market with diversified demand, and the comprehensive replacement of fuel vehicles by electric vehicles is affected by many factors. First of all, the mental positioning of each consumer product category for consumers plays a fundamental role in the development of the market. After nearly a decade of market cultivation and rapid development, the labels of "intelligent interconnection" and "cost-effective" of electric vehicles have been engraved in the hearts of consumers. At present, many consumers will prefer electric vehicles or new energy vehicles when buying new cars. For Chinese people buying cars, electric vehicles well meet the needs of "inside and face" - cost-effective "lizi" and intelligent interconnection "face". When companies see the attitude of consumers, they will launch more products (in 2023, more than 100 new energy models are expected to be launched), and will accelerate the iteration of products, in short, compete to "roll up" to meet consumer needs.
It can be expected that in the next 2-3 years, new energy vehicles represented by electric vehicles will continue to encroach on the fuel vehicle market and achieve rapid growth in the trade-off pattern. However, once the market penetration rate of electric vehicles exceeds half, such as reaching 60%, the market is likely to turn into a relatively balanced "stalemate" state of the market structure of electric vehicles and fuel vehicles, and this steady-state structure may remain for a long period of time until the technology of electric vehicles (such as battery life and fast charging technology) achieves breakthroughs again, such as battery life and charging.
The reasons for this are not complicated. In terms of the purchase cost of vehicles, considering the maturity of technology, fuel vehicles have room for continuous price reduction; After the cancellation of the electric vehicle subsidy policy, its cost performance will be greatly reduced, and it has long been an open secret that electric vehicle companies sell cars at a loss (except for Tesla, BYD and CATL, which sells batteries), and there is little room for further price reduction. In terms of cost of use, when the share of electric vehicles reaches a certain high proportion (such as 6-7 percent), the slowdown in sales of fuel vehicles leads to a decline in demand, which will promote the decline in fuel prices, so that the cost of fuel vehicles will be reduced, and the price of electricity is likely to increase; In terms of vehicle experience, fuel vehicles are also learning from the advantages of electric vehicles, such as more intelligent vehicle-machine systems to achieve more friendly human-computer interaction and achieve progress with the times; Finally, due to the inertia of consumption and the characteristics of some market segments (such as off-road SUVs, which often drive between remote mountainous areas and lofty mountains), there will always be a part of the "iron powder" of fuel vehicles to maintain the inherent share of fuel vehicles.
At the macro level, policies are changing, and 2023 may become the last year of the new energy car purchase subsidy policy, and the "special care" in terms of license plate policy will also be abolished. Judging from the recent statement of the Passenger Association, there is a high probability that the green card will be canceled within 2 years. In this way, it will also greatly weaken the competitiveness of new energy vehicles.
From the government's deep-seated considerations, the government's goal is to achieve both economic growth and green environmental protection, and the rapid demise of fuel vehicles is not in line with this goal. Different from the mobile phone category, there is a huge industrial supply chain system behind the car. The average car has about 10,000 non-disassembleable individual parts, while mobile phones have only a few hundred parts. Taking Changchun as an example, as a pillar industry in Changchun, the output value of automobiles accounts for more than 70% of the city's industry. The rapid change of the market is not a good thing for many traditional automobile enterprises in China and for the economic development and employment of many cities similar to Changchun in China.
On March 28, the Council of the European Union approved a regulation banning the sale of new petrol cars and minivans that cause carbon emissions from 2035. The EU's approach, of course, is to give traditional fuel vehicle companies more sufficient time for transformation, and it is the result of comprehensive consideration of taxation, employment, environmental protection and other aspects.
Finally, some people have always compared the mobile phone industry to the automotive industry, and Apple's subversion of Nokia to Tesla's agitation of the automotive industry. Admittedly, there are some truths and similarities, but until now, the difference between electric vehicles and fuel vehicles is not as great as the difference between smartphones and functional machines, and this characteristic will lead to the coexistence of fuel vehicles and electric vehicles, and even provide a basis for long-term coexistence. Moreover, there are plug-in hybrid models and extended-range models between oil vehicles and trams, in this sense, how can fuel vehicles be completely finished, but the traditional fuel vehicle market will indeed shrink rapidly.