(There is a picture at the end of the article as usual)
Hello everyone, I'm a very handsome fox 🦊 and I'm going to talk a few words today
New energy vehicles
Mention a few risks
A few days ago (April 23), the European Commission came out and said that it had raided the offices of Chinese companies in Europe. The main reason is to investigate whether these companies have received subsidies from our government. The impact of this kind of surprise inspection is quite bad, after all, it directly affects the normal operation of the enterprise. And if it is aimed at a specific country, it has actually become a part of political play.
In fact, in September last year, the European Union said that it would launch a countervailing investigation on our electric vehicles, so this risk has been priced in by the market. Mainly today, I also saw another piece of news, which seems to be about Xinjiang again, which may pose another risk to Chinese car companies (Part 2 of this article). So I'm going to talk about it today.
Today I will answer these questions - is our new energy vehicle export really so fierce? Many people say that the export of new energy vehicles depends on Tesla's Shanghai factory, and local brands are not welcomed in Europe and the United States, is it true? What are the risks of this track next?
Part 1 咱真的很猛吗？
In the automotive industry, we are really fierce - after all, China surpassed Japan for the first time last year to become the world's largest car exporter.
However, this "world first" is actually a bit of luck - according to the report of the China Association of Automobile Manufacturers, most of the exported cars in the first three quarters were exported to Russia and Mexico (most of them are fuel vehicles).
This is mainly because Europe and the United States imposed sanctions on Russia, which affected the supply chain of European, American, Japanese and South Korean car companies, so Chinese car companies took over this pouring wealth.
Anyway, we're also a first. Although our cars are not mainly sold to Europe, after all, the automobile industry is the traditional strength of others. We are so showy, people really can't hang their face.
Of the 4.91 million vehicles exported by China last year, 1.203 million were new energy vehicles (CAAM). In the field of electric vehicles, European automakers are not even very competitive for their own turf - according to the International Energy Agency, the market share of local brand electric vehicles fell from 80% in 2015 to 60% last year. On the other hand, Chinese brands rose from 5% in 2015 to 15% last year. Many of them are the British brand MG (MG) acquired by SAIC, and the Swedish brand Volvo and its subsidiary Polestar acquired by Geely.
It should also be said here that there has always been a saying that our new energy vehicle exports mainly rely on Tesla's Shanghai factory. This is indeed an exaggeration, but in terms of exporting to Europe, our own brand is indeed not the main force, and it mainly relies on the factories built in China by American or European car brands. According to a report by Jiemian News, in 2022, only 40% of China's electric vehicles exported to the EU will be Chinese local brand cars.
However, according to a report by the European Federation for Transport and the Environment (T&E) in March, home-grown brands such as BYD are also starting to make efforts. The report predicts that the proportion of Chinese brands in China's exports of electric vehicles to the EU will increase significantly in the future.
Source / T&E, Translation/ Very handsome investor
However, this report is also to allow the EU to increase tariffs on our car companies (proposing to increase 25%), so let's just take a look at the forecast data.
Anyway, if the EU's countervailing investigation really finds out something, the EU will raise taxes on Chinese-made electric vehicles from July this year...
Part 2 There is also a risk!
Today, my friend Xiaoying also shared a news with me -
Source/ business-humanrights.org
The European Parliament has adopted the Corporate Sustainability Due Diligence Directive (CSDDD), which still needs to be formally approved by the European Council, but it is basically out of the question. To put it simply, large companies established in the EU (1000+ employees with global revenues of more than 450 million euros) or overseas companies with revenues of more than 450 million euros in the EU need to do due diligence on partners upstream of the supply chain to ensure that suppliers cannot do anything harmful to human rights and the environment, otherwise they will be fined no less than 5% of their global revenue.
As for Europe and the United States, as long as it is related to our business in Xinjiang, it will be labeled as "forced labor". The "Xinjiang cotton" incident that caused a lot of uproar before is typical - after all, the United States let the little blacks grow cotton, and it just so happens that Xinjiang is also rich in cotton, so this hat is naturally buttoned by the Western media. And they don't listen to you to prove your innocence (of course, it's more likely that you're deliberately stirring up trouble).
Among the new energy vehicle companies, many raw materials happen to be mined in Xinjiang. For example, aluminum (Tianshan Aluminum, Xinjiang Zhonghe), such as lithium (Zhicun Lithium invested by CATL). And it's hard to trace back to the source – because when these raw materials are mined, they are mixed with materials from other sources and then flow into the depot together.
For example, in 2023, Germany has already introduced a similar law ("German Supply Chain Enterprise Due Diligence Obligation Act"), and there happened to be a recent case - Mercedes-Benz (a German car company) engaged in anti-union actions in a factory in the United States, and was sued by the United Auto Workers. If the charges are confirmed, Mercedes-Benz in Germany would have to be fined billions of dollars and not be able to take government orders.
Therefore, European and American car companies will also be worried about this risk if they have factories in China.
The most directly affected are naturally upstream suppliers. This seems to be able to explain Ganfeng Lithium's strange operation in October last year-
In addition, according to this logic, PV may have similar risks (Xinjiang also has silicon mines).
Of course, there is also the biggest ghost story of new energy vehicles exported to Europe - "de-electrification".
After all, charging piles in Europe can't be like an infrastructure power like ours, and they will spring up everywhere in a few years. According to the data of the China Automobile Association, we have a charging pile for 2.4 vehicles, while 15 vehicles in Europe and the United States only have a charging pile. If you think about it ten years ago, this was the reason why many people didn't buy an electric car.
Recently, the ghost story has been brought up again - in early March, Mercedes-Benz announced that it would postpone its electrification target by five years due to the continued sluggish demand for electrification. In November last year, Volkswagen announced that it would not make a decision on the location of its fourth battery plant for the time being due to lower-than-expected demand for electric vehicles in the European market.
Of course, the above 👆 report is a bit of a headline. European car sales in March were not good, partly because of the seasonal effect, this year's Easter was in March (last year in April), so the number of new car registrations in Europe for the whole of March was down 2.8% compared to the same period last year. The other part is because some European countries have begun to cut subsidies, so European pure electric vehicle sales fell by 11% year-on-year in March. In other markets, for example, Italy may have recently introduced new subsidies, so many consumers have held on to their purchase decisions, resulting in a 34% year-on-year decline in EV sales in March.
However, there are still many car companies panicking. Tesla, for example, saw its sales fall 35% in Europe. This was mainly due to tensions in the Red Sea, which affected the delivery of upstream components, and the factory was forced to shut down. I don't know if it's because of this, Tesla has also recently laid off employees around the world-
According to Xiaoying's sharing, compared with other manufacturing factories, many car companies tend to be half a beat slower than external policy changes. Therefore, the object of this article is actually car companies, not investors. After all, investors are always prescient - the new energy vehicle sector has been in decline since the beginning of this year.
Finally, let's summarize a picture as usual -
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「Greed is good.」
All contents of "Very Handsome Investor" are for the purpose of imparting knowledge and financial education only and do not constitute any investment advice. Please refer to the latest article.
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✍🏻 Photo/ @狐狸君raphael, formerly worked in the financial institutions group of McKinsey & Company, and also worked at Google and VC. He is a columnist for Wall Street News, 36Kr, Sina Finance, Southern Weekly, Linkedin and other media outlets, and is the author of the best-selling books "Pig on the Wind" and "Cashless Era".
📚 参考资料/《【侠客岛】“抵制新疆棉花”，一场设计了一年多的阴谋》《风口浪尖上的新疆棉》《比亚迪全线进军海外市场，成功突破贸易壁垒》《一巨头宣布正式撤出，6.96元甩卖资产，将巨亏近50亿元！》《中国纯电汽车出口欧洲谁最多？比亚迪只排第3》《China-made vehicles will make up a quarter of Europe's EV sales this year》《How Europe can use tariffs as part of an industrial strategy》《上汽“统治”下的MG，国内销量低迷，却在欧洲市场大割“韭菜”！_懂车帝》《可惜！无合适项目开发，锂资源巨头赣锋锂业注销新疆参股公司》《宁德时代增持志存锂业，后者增资至8153万元》《锂资源又有入局者！35亿倍杰特拟牵头投资20亿新疆锂资源开发》《天力锂能：已开发针对低空飞行器的锂电池正极材料，新疆叶城锂矿开发暂无进展》《双碳晚报｜七部门发布关于进一步强化金融支持绿色低碳发展的指导意见 外交部回应欧盟调查中国风力涡轮机供应商》《 潜力无限｜深入挖掘，新疆矿产资源储量巨大（矿产篇）》《Solar panel maker Meyer Burger could close German plant | Reuters》《24% Plugin Vehicle Share in Europe - CleanTechnica》《沃尔沃2月销量同比下降2% 欧洲销量保持强劲》《2月份大陆汽车整车出口39.4万辆，环比下降10％》《欧盟反补贴难挡中国电动汽车出口之势》《大陆汽车出口保持高增，欧洲出台新补贴法增添变数》《反补贴调查后，中国对欧盟电动车出口大幅下滑》《欧盟急了》《The world’s electric car fleet continues to grow strongly, with 2024 sales set to reach 17 million - News - IEA》《Global EV Outlook 2023 – Analysis - IEA》《Trends in the electric vehicle industry – Global EV Outlook 2024 – Analysis - IEA》《EU set to allow possible retroactive tariffs for Chinese EVs | Reuters》《欧盟宣布将对中国出口电动汽车发起反补贴调查，商务部回应》《欧洲成中国汽车最大出口目的地，传统汽车制造商和特斯拉是出海主力》《协同推进新能源汽车贸易合作》《日媒关注：确认超过日本，中国成世界最大汽车出口国》《2023年10月汽车工业产销情况》《2023年8月汽车工业产销情况》《出口繁荣、销量低迷，国产电车还没撞开欧洲的铁墙|奔驰|比亚迪_网易订阅》《国内汽车出口哪家强？特斯拉第三，第一出口接近百万！》《中国汽车出口量猛增，谁卖的？卖给谁？》《共计出口1.06万亿！中国新能源汽车席卷欧洲》《欧盟突击检查中企在欧办公室，商务部：坚决维护中企正当权益_自贸区连线_澎湃新闻-The Paper》《BREAKING: EU Parliament approves Corporate Sustainability Due Diligence Directive - Business & Human Rights Resource Centre》《美国工会在德国指控奔驰集团违反德国关于全球供应链的新法律》《UAW Files Charges in Germany Against Mercedes-Benz: Company's Anti-Union Campaign Against U.S. Autoworkers Violates New German Law on Global Supply Chain Practices - UAW | United Automobile, Aerospace and Agricultural Implement Workers of America》《出口繁荣、销量低迷，国产电车还没撞开欧洲的铁墙|奔驰|比亚迪_网易订阅》《3月欧洲汽车市场表现疲软，纯电车型销量下滑明显》《特斯拉全球裁员10%，马斯克面对的麻烦有多大？-新华网》《欧洲港口，堆满卖不出去的中国电动车 - 经济观察网 － 专业财经新闻网站》《3月欧洲车市：纯电销量下滑11%，特斯拉大跌35%|电动汽车_新浪财经_新浪网》《提醒一下，桩企出海不要漫天撒网！》《新能源车行业研报：欧洲电动车倒在缺少充电桩？》《欧洲新能源的2022：车市火爆，充电桩拖后腿》《光伏海外建厂热情高，警惕供需关系全新考验》《内外交困下，光伏出海如何破局？》《强势中国光伏在法国失色：碳壁垒如何击破|清洁能源|能源消费总量_网易订阅》《欧盟酝酿对中国光伏企业“下手”？业内人士警告：贸易壁垒将致两败俱伤》
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