China's new energy vehicle overcapacity? Expert: Unfounded

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Xinhua Finance|China's new energy vehicle overcapacity? Expert: Unfounded

Xinhua News Agency, Beijing, June 30 (Reporter Yu Rui, Li Tangning) Recently, a roundtable dialogue on "China's new energy vehicle industry development and cooperation opportunities under the global green transformation" hosted by the China Macroeconomic Research Institute was held in Beijing. Experts at the meeting said that the development of the new energy industry in the mainland has made a positive contribution to the global green and low-carbon transformation, and the capacity utilization rate of the new energy vehicle industry in the mainland is about 80%, and there is no overcapacity.

The mainland will develop new energy industries and promote the global green and low-carbon transformation

"The export of new energy products from the mainland has made great contributions to the global response to climate change and green and low-carbon transformation." Huang Hanquan, president of the China Macroeconomic Research Institute, said that in 2022, the mainland's renewable energy generation and exported wind power and photovoltaic products contributed more than 2.8 billion tons of carbon dioxide equivalent, accounting for about 41% of the world's renewable energy carbon emission reduction in the same period, which is a relatively high proportion.

According to the data, in 2023, the global renewable energy capacity will be added by 510 million kilowatts, of which the mainland will contribute more than 50%. At present, China's photovoltaic and wind power products have been exported to more than 200 countries and regions around the world, providing high-quality green products for all countries.

"Looking ahead, we need to be soberly aware of the major challenges we are facing: first, July 2023 is the highest month on record for the global average temperature, and we are facing not only climate change, but also an urgent climate crisis; Second, global energy-related carbon dioxide emissions are increasing year by year, reaching a new high in 2023; Third, affected by geopolitical conflicts and market fluctuations, fossil energy prices hit a new high in 2022. These trends point to the urgent need for global cooperation to accelerate the green and low-carbon transition to address the climate and energy crises. An Qi, an associate researcher at the Energy Research Institute of the China Macroeconomic Research Institute, said.

In response to the above challenges, new energy vehicles will play a more important role. According to data from the China Association of Automobile Manufacturers, from 2020 to 2023, the penetration rate of new energy vehicles (including passenger cars and commercial vehicles) in mainland China has climbed from 5.4% to 31.6%, and is expected to approach 40% in 2024. The production and sales of new energy vehicles in mainland China have ranked first in the world for nine consecutive years, and the number of new energy vehicles in China has exceeded half of the global total.

"It is expected that after carbon neutrality is achieved in the future, the proportion of electric vehicles in the passenger car field in mainland China will reach more than 90%. On the consumer side, the decarbonization of the power system and the electrification of the consumer side must complement each other in order to achieve the goal of low-carbon transformation of the whole system. New energy vehicles continue to lead the rapid momentum of transportation electrification, driving the pace of low-carbon transportation transformation. Angel said.

According to the data, in 2023, the new installed capacity of new energy storage in mainland China will account for nearly 50%, providing flexible resources for the power system to absorb renewable energy. In 2023, the newly installed capacity of new energy storage projects that have been completed and put into operation in mainland China will increase by more than 260% compared with the end of 2022, nearly 10 times the installed capacity at the end of the 13th Five-Year Plan.

Mainland new energy products have driven down the cost of new energy in the world. "In 2023, domestic PV module prices will drop by more than 90% compared to 2010. Over the past 10 years, the average LCOE of wind and photovoltaic power projects has fallen by more than 60% and 80% respectively, thanks in large part to mainland products. ”

There is no overcapacity in the new energy vehicle industry in China

On June 12, the European Commission announced that if a solution cannot be reached with China, the plan to impose temporary countervailing duties on electric vehicles imported from China will be implemented from July 4. The European Commission said it would impose additional countervailing duties of 17.4%, 20% and 38.1% on the three companies sampled – BYD, Geely Automobile and SAIC. an average of 21% countervailing duty on EV manufacturers that participated in the survey but were not sampled; EV manufacturers that fail to cooperate with the investigation will be subject to an additional 38.1% countervailing duty. Canada will also launch a 30-day public consultation period starting July 2 to discuss a series of proposed measures for China's EV imports.

"The accusation of overcapacity of new energy vehicles in mainland China is baseless. The imposition of countervailing duties and other practices ignore the facts and are typical of trade protectionism. Huang Hanquan said.

Huang Hanquan believes that in the context of economic globalization, all countries participate in the international division of labor according to their comparative advantages, form their own different industrial structures and industrial scales, and share the benefits brought by the specialized division of labor through international trade of "buying the world and selling the world". This not only improves the efficiency of global resource allocation, but also enhances the well-being of the people of all countries, and is the result of the deepening of the international division of labor and fair competition in the global market.

"Dumping is the practice of exporting products abroad at a price below cost. However, there is no low-price dumping in the mainland's exports of new energy products. Huang Hanquan said that the mainland's new energy products are cost-effective, the comparative advantage is obvious, and the price of new energy vehicles exported is lower than that of similar local models, but it is still higher than the domestic sales price.

Wu Songquan, senior chief expert of China Automotive Technology and Research Center, said that the price of new energy vehicles of local brands in Germany and Europe is about twice that of domestic prices, but they are still very competitive.

Moreover, the capacity utilization rate of new energy vehicles in mainland China is about 80%, and the capacity utilization rate of some large new energy vehicle companies exceeds 100%. Such a high capacity utilization rate has made the accusation of overcapacity of new energy vehicles in mainland China self-defeating. Jin Ruiting, a researcher at the Institute of Foreign Economic Research of the China Academy of Macroeconomics, said that China's new energy vehicle purchase subsidy policy has also expired at the end of 2022.

From the perspective of the development space of the global new energy vehicle market, there is no possibility of overcapacity.

"According to the forecast of the International Energy Agency, the global demand for new energy vehicles will reach 45 million units in 2030, which is about three times the global sales in 2023 and about five times the sales in the mainland. With such a large demand space, how can there be overcapacity? Jin Ruiting said.

According to the data, by the end of 2023, the number of new energy vehicles in mainland China accounted for 6.07% of the total number of vehicles. This data shows that the proportion of new energy vehicles in the mainland is still low, and it also shows that new energy vehicles have huge room for development in the domestic market. The huge domestic market and domestic demand potential can provide strong support for the development of the new energy vehicle industry in the mainland. Cui Fan, a professor at the University of International Business and Economics, said.

Source: Xinhua News Agency