news

Our reporter Yin Limei and Tong Haihua reported from Beijing

"By 2035, new energy vehicles will become the mainstream of new sales vehicles." On August 11, the CPC Central Committee and the State Council issued the "Opinions on Accelerating the Comprehensive Green Transformation of Economic and Social Development" (hereinafter referred to as the "Opinions"). The "Opinions" redefined the development goals of my country's new energy vehicles in the next stage.

Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers (hereinafter referred to as "CAAM"), told a reporter from China Business News that the goal of "by 2035, new energy vehicles will become the mainstream of new sales vehicles" is generally consistent with the previously released "New Energy Vehicle Industry Development Plan (2021-2035)", and the former is easier to achieve than the latter.

The "New Energy Vehicle Industry Development Plan (2021-2035)" is a document issued by the General Office of the State Council in November 2020. The "New Energy Vehicle Industry Development Plan (2021-2035)" points out that by 2035, pure electric vehicles will become the mainstream of new sales vehicles. The "Opinion" changes "pure electric vehicles" to "new energy vehicles". The new energy vehicles referred to in my country include pure electric vehicles, plug-in hybrid (including extended-range) vehicles and fuel cell vehicles. Obviously, the "threshold" for achieving the goals set by the "Opinion" is lower.

Market share may reach 80% in 2035

At present, the growth rate of domestic plug-in hybrid vehicles is far ahead of that of pure electric vehicles, and they are an important force driving the growth of the new energy vehicle market.

On August 9, data released by the China Association of Automobile Manufacturers showed that in July 2024, domestic sales of new energy passenger vehicles reached 853,000 units, with a penetration rate of 53.5%, surpassing the market share of fuel vehicles for the first time. Among them, pure electric models sold 551,000 units, a year-on-year increase of only 2.6%; plug-in hybrid models sold 438,000 units, a year-on-year increase of 80.7%. From January to July 2024, sales of pure electric models were 3.57 million units, a year-on-year increase of 10.1%; sales of plug-in hybrid models were 2.361 million units, a year-on-year increase of 84.5%. Plug-in hybrid models are considered to be the key reason why the penetration rate of new energy passenger vehicles in China has exceeded 50%.

"Becoming mainstream means that the market share of new energy vehicles must be at least more than half. By 2035, my country's automobile sales are expected to be around 40 million, which means that the sales of new energy vehicles must reach at least 20 million by then. In fact, from now on, we judge that the market share of new energy vehicles will be higher by then, above 60%, and even up to 80% is possible. It may exceed 40% for the whole year of this year." Xu Haidong said.

my country has been vigorously developing new energy vehicles since 2009, and has become the world's largest new energy vehicle market in 2015. From 2015 to 2023, China's new energy vehicle production and sales have ranked first in the world for nine consecutive years.

In recent years, the penetration rate of new energy vehicles in my country has risen rapidly. In 2021, the penetration rate of new energy vehicles in my country was less than 15%, and it will be 35.7% in 2023.

The industry generally holds a positive attitude towards the future development of new energy vehicles in my country. Last month, the "Global Automotive Market Outlook" report released by US consulting firm AlixPartners showed that China's new energy vehicle market is much more mature than Europe or the United States. It is expected that by 2030, the share of new energy vehicles in the entire Chinese market will increase from 41% in 2024 to 77%, mainly because the price of pure electric vehicles (BEV) is similar to that of fuel vehicles, the charging infrastructure is relatively complete, and it is easier to obtain BEV licenses in China. In contrast, in Western countries, the price of BEV is 35%-55% higher than that of fuel vehicles.

Zhang Yichao, partner of AlixPartners' Greater China automotive consulting business, said in an interview with reporters: "This year, in our survey and research, we found that there are very obvious differences between Chinese and European or American consumers. For their next car, the proportion of Chinese consumers who may buy a pure electric car is quite high. The main reason driving consumers to make such a decision is that Chinese pure electric products have a certain cost-effectiveness. For example, to some extent, the price of BYD Yuan Plus electric car is already lower than that of fuel vehicles of the same level."

Intelligent networked new energy vehicles are responsible for China's transformation from a "big automobile country" to a "strong automobile country". Xu Haidong believes that the development of solid-state batteries, the improvement of charging infrastructure and the development of hybrid technology will provide impetus for the leap forward of China's new energy vehicle industry.

Xu Haidong said that the industry predicts that solid-state batteries will be installed in small batches in 2027 and 2028. By 2035, solid-state battery technology will be relatively mature and its cost will also decrease. By then, there will be more pure electric vehicles with a range of 1,000 km equipped with solid-state batteries, which will be conducive to the development of pure electric vehicles.

Charging infrastructure is crucial for the further penetration of new energy vehicles. Xu Haidong believes that if the range of pure electric vehicles equipped with solid-state batteries can reach 1,000 km and solid-state batteries can be fast-charged, then with the development of fast-charging technology and the popularization of fast-charging stations, new energy vehicles should once again usher in a period of rapid development.

From another perspective, Xu Haidong believes that the current development trend of hybrid technology in my country is very good, and the range of hybrid vehicles has reached more than 2,000 km. Hybrid technology will also have corresponding development space in the future. "Through the joint development of plug-in hybrid and pure electric vehicles, it will not be a big problem to achieve the goal of 'new energy vehicles becoming the mainstream of new sales vehicles by 2035'."

Rural and commercial vehicle scenarios have great potential for imagination

The rural market is the main incremental market for new energy vehicles and the entire automotive industry in the future. According to previous judgments, due to the low income in rural areas, old models will be more attractive to rural market consumers. However, Xu Haidong believes that if new energy vehicles and their supporting facilities are further developed, and rural incomes increase, rural market consumers will directly turn to new energy vehicles, which is also very meaningful for my country's green transformation.

Xu Haidong told reporters that in the commercial vehicle sector, pure electric light trucks will support a part of the incremental space for new energy vehicles. For heavy trucks, hydrogen energy will be an entry point to enter the new energy development path. With the improvement of the hydrogen refueling facility network, the development of hydrogen production, transportation and refueling technologies, and the reduction of costs, the hydrogen heavy truck industry will develop.

At the same time, Xu Haidong said that hydrogen fuel cell stacks may be used in passenger cars in large quantities in the future, and technological breakthroughs will drive down costs, which will bring hydrogen fuel cell passenger cars into the consumer's field of vision and compete with pure electric vehicles in the future, or play their respective advantages in different usage scenarios.

The battery stack is the core component of hydrogen energy batteries. The hydrogen fuel cell system is to hydrogen fuel vehicles what the engine is to traditional fuel vehicles. The battery stack is the "heart" of the system, accounting for about 50% of the battery system cost.

The reporter noticed that the "Opinion" also stated that it will support the issuance of infrastructure real estate investment trusts (REITS) for qualified green transformation-related projects such as new energy, ecological and environmental protection.

Xu Haidong believes that this is undoubtedly a positive for the construction of rural charging infrastructure. "At least from the perspective of funding, it has created such a model, which can help state-owned enterprises or other types of charging pile companies to speed up their layout in rural areas."

Earlier, the China Electric Vehicle Charging Infrastructure Promotion Alliance said in an interview with reporters that the total number of public charging piles below the county level in my country currently only accounts for 11.28% of the total number of public charging piles in the country, which is still relatively weak overall. The total number of public charging piles below the county level accounts for 12.11% of the total number of public charging piles in the country; the total number of DC charging piles below the county level accounts for 14.51% of the total number of DC charging piles in the country, and the total number of AC charging piles accounts for 9.47% of the total number of AC charging piles in the country. The utilization rate of public charging facilities in rural areas is restricted by the number of new energy vehicles, and the utilization rate is significantly lower than the average level, making it difficult to attract operators to invest in construction. In this case, effectively guiding social capital to enter is a possible breakthrough point.

In addition, the Opinions also mentioned that we should actively expand green consumption and improve the incentive mechanism for green consumption. In the future, we will optimize the government's green procurement policy, expand the scope and scale of green product procurement, and incorporate carbon footprint requirements into government procurement in a timely manner. We will guide enterprises to implement green procurement guidelines, encourage qualified enterprises to establish green supply chains, and drive the coordinated transformation of upstream and downstream enterprises. We will support qualified regions to encourage enterprises to adopt "old for new" and other methods through the issuance of consumer coupons and green points, and guide consumers to buy green products. We will carry out activities to promote new energy vehicles, green smart home appliances, water-saving appliances, energy-saving stoves, and green building materials in rural areas, and strengthen the construction of supporting facilities and after-sales service guarantees. We will encourage users to expand green energy consumption.

(Editor: Zhang Shuo, Reviewer: Tong Haihua, Proofreader: Zhai Jun)