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Source: Economic Information Daily

□Reporter Wu Wei

Driven by multiple favorable factors, the new energy vehicle market has accelerated beyond the landmark node and is expected to start a new round of upward cycle in the second half of the year. The steady development of the new energy vehicle industry has become an important force leading the green transformation.

The automobile market is “green, fat, red and thin”

Data released recently show that my country's new energy vehicle market is still growing rapidly.

On August 14, data released by the Passenger Car Market Information Joint Branch of the China Automobile Dealers Association (hereinafter referred to as "CPCA") showed that from August 1 to 11, the new energy passenger car market retailed 274,000 vehicles, an increase of 57% over the same period last August and 25% over the same period last month. Previously, data released by the CPCA on August 8 showed that in July, the domestic retail penetration rate of new energy passenger vehicles reached 51.1%; conventional fuel passenger cars retailed 840,000 vehicles and new energy passenger cars retailed 878,000 vehicles. This is the first time that the monthly retail sales of new energy passenger cars in China have exceeded those of traditional fuel passenger cars.

In fact, July is the traditional off-season for the automobile industry. Combined with factors such as insufficient consumer confidence and frequent natural disasters, the overall production and sales of automobiles in July declined to a certain extent both month-on-month and year-on-year, but new energy vehicles still stood out. The automobile production and sales data for July released by the China Association of Automobile Manufacturers showed that the production and sales of new energy vehicles reached 984,000 and 991,000 respectively, up 22.3% and 27% year-on-year respectively.

Many automakers are also "not slow in the off-season": BYD, the leader in new energy vehicles, set a new monthly sales record in July, reaching 342,400 vehicles, a year-on-year increase of 30.6%; new power brands such as Ideal Auto and Leapmotor all set historical highs. Among traditional automakers, new energy vehicle sales of Changan Automobile, Geely Automobile, Chery Automobile and other brands also achieved year-on-year growth to varying degrees in July. Among them, Chery Automobile's new energy vehicle sales in July were 45,400 vehicles, a year-on-year increase of 254.5%.

Industry insiders said that the monthly penetration rate of the passenger car market exceeded 50% for the first time, which is a vivid portrayal of the transformation and upgrading of China's automobile industry. In 2022, my country's new energy vehicles will account for 25.6% of the domestic market, completing the goal of 25% market penetration three years ahead of schedule. In just over a year, the passenger car market penetration rate has exceeded the 50% mark. Such an "astonishing" speed shows that new energy vehicles in my country have changed from being driven by policies to being driven by real consumer demand, and the underlying reason is the strong product strength.

Cui Dongshu, secretary-general of the China Passenger Car Association, believes that China's new energy passenger car retail sales have surpassed fuel vehicles for the first time, indicating that consumers' recognition of new energy vehicles is constantly increasing and their willingness to purchase has also increased significantly, driving the entire Chinese automobile industry to transform towards new energy vehicles.

Chen Shihua, deputy secretary general of the China Association of Automobile Manufacturers, also said that the sales of plug-in hybrid vehicles increased by 80.7% year-on-year in July, which was much higher than that of pure electric vehicles, and has become the main factor in the current growth of new energy vehicle sales. The addition of more and more models has increased the market competitiveness of such models and promoted sales growth.

It is worth mentioning that data from the China Passenger Car Association showed that Chinese-branded passenger cars had a market share of 66.4% in July, a further increase from previous months, indicating that the rapid rise of Chinese independent brands relying on new energy categories remains strong.

Multiple positive factors will continue

The rapid development of China's new energy vehicles is inseparable from the strong promotion of multiple factors such as market, policy, and technology, and more favorable factors are still on the way.

The "Opinions on Accelerating the Comprehensive Green Transformation of Economic and Social Development" (hereinafter referred to as the "Opinions") issued by the CPC Central Committee and the State Council was released on August 11, proposing to promote low-carbon transportation tools, vigorously promote new energy vehicles, promote the electrification of urban public service vehicles, accelerate the elimination of old transportation tools, and promote zero-emission freight. By 2035, new energy vehicles will become the mainstream of new sales vehicles.

Industry insiders believe that the Opinions have important guiding significance for the automobile industry to achieve green transformation, low-carbon environmental protection, and high-quality development. In recent years, in the promotion of new energy vehicles, passenger cars have been faster than commercial vehicles. The Opinions proposes the electrification of urban public service vehicles and the promotion of zero-emission freight, which is targeted to a certain extent.

Earlier, at the beginning of 2023, the Ministry of Industry and Information Technology and eight other departments jointly issued the "Notice on Organizing the Pilot Work of the Pilot Zone for the Full Electrification of Public Sector Vehicles", which became a signal that my country's public sector vehicles are moving towards full electrification. The "Opinion" once again proposed the electrification of public sector vehicles, which not only once again demonstrated my country's firm determination for green development, but also made it clearer that the automotive industry is bound to develop towards new energy.

The industry believes that, on the one hand, public-sector vehicles are used frequently, and their total fuel consumption and pollution emissions account for a large proportion. By implementing the electrification of urban vehicles, energy use can be reduced by 70%, carbon dioxide emissions can be reduced by 80%, and urban transportation costs can be reduced by 40%; on the other hand, public-sector vehicles have a strong demonstration and leading role. Electrification will not only drive the new energy commercial vehicle market, but also play a demonstration and leading role in the comprehensive market expansion of new energy vehicles.

At present, cities such as Beijing, Chengdu, Shenzhen, and Hangzhou are vigorously promoting the electrification of urban taxis and buses. The Shanghai Municipal Transportation Commission and five other departments recently issued the "Special Work Plan for Large-Scale Facility and Equipment Renewal in Shanghai's Transportation Sector (2024-2027)", which mentioned that it is planned that by the end of 2027, all Shanghai buses and taxis will be fully powered by new energy.

The Opinions also proposed to carry out activities such as new energy vehicles going to the countryside and old-for-new vehicles. In recent years, the new energy vehicles going to the countryside organized by multiple departments have achieved initial results. From 2022 to 2023, the penetration rate of rural electric vehicles has increased from 4% to 17%, a significant increase. The old-for-new policy for cars has also boosted the consumption of new energy vehicles to a certain extent. According to the latest subsidy standards issued by the state, the subsidy amount for scrapping and updating cars will be increased to 20,000 yuan for the purchase of new energy passenger cars, and 15,000 yuan for the purchase of fuel passenger cars with a displacement of 2.0 liters or less. Since the subsidy for new energy vehicles is higher than that for fuel vehicles, it has a certain guiding effect on consumers to buy new energy vehicles. Many places are also issuing car consumption coupons while implementing this policy. At the same time, car manufacturers are also making matching concessions, superimposing multiple discounts, which is more attractive to consumers to replace new energy vehicles.

Wang Qing, deputy director of the Institute of Market Economy at the Development Research Center of the State Council, believes that the substitution effect of new energy vehicles on fuel vehicles is gradually increasing. In 2027, the new energy vehicle market will be in a stage of rapid substitution for fuel vehicles, and the production and sales volume of new energy vehicles in my country will reach 30 million in 2030. Therefore, by 2035, the goal of new energy vehicles becoming the mainstream of new sales vehicles can basically be achieved.

Green transportation is expected in the future

In China, the world's largest automobile market, the monthly penetration rate of new energy passenger vehicles exceeds 50%. Industry analysts believe that this is not only an important milestone in the transformation and upgrading of China's automobile industry, but also has important significance for the green upgrade of the global automobile industry.

As we all know, transportation is one of the main areas of energy consumption and greenhouse gas emissions. According to data from the Ministry of Transport of China, transportation energy accounts for about 17% of China's energy consumption structure at this stage. Among them, fossil energy accounts for more than 95% of transportation energy. At the same time, the automobile industry connects many upstream and downstream industrial chains and plays an irreplaceable and important role in green transformation and low-carbon development. At present, my country's new energy vehicles are growing steadily and have become a pioneer in leading green transformation.

Industry insiders believe that driven by multiple factors, the automotive market will accelerate its transformation to electrification. In addition to the replacement of the existing market, the continuous improvement of charging infrastructure will bring incremental space for new energy vehicles. The latest data released by the National Energy Administration shows that as of the end of June this year, the total number of charging piles in my country reached 10.244 million, and more than one-third of the provinces in the country have deployed charging facilities in all towns, which strongly supports the development of new energy vehicles.

In addition, the integration of new energy vehicles and various transformative technologies such as artificial intelligence, the Internet, and big data will continue to open up new market space. Intelligent connected vehicles are an important direction for the transformation and upgrading of the global automotive industry. As a product of cross-border integration of industries such as automobiles, communications, and transportation, intelligent connected vehicles have become a hot spot for global industrial innovation and a commanding point for future development. According to data from industry organizations, the scale of China's intelligent connected vehicle industry is expected to grow from 1.7 trillion yuan in 2019 to 1.3 trillion yuan in 2024, with an annual compound growth rate of more than 50%, indicating that the market has good confidence in the development of intelligent connected vehicles.

Cui Dongshu said that with the continuous integration of new technologies such as intelligent networking and artificial intelligence in the future, automobiles will be given more possibilities and set sail towards the distant future of intelligent and green travel.