Oil truck, is it over?
2024-08-21
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In July this year, the number of consumers buying new energy vehicles exceeded that of fuel vehicles for the first time. Suddenly, buying fuel vehicles has become a "minority".
This time point comes earlier than many institutions predicted and can be regarded as a historic turning point for the Chinese auto market.
According to data from the China Association of Automobile Manufacturers, domestic sales of passenger cars reached 1.595 million in July, of which sales of new energy passenger cars increased to 853,000, while sales of traditional fuel passenger cars reached 742,000, a decrease of 383,000 from the same period last year.
At the same time, the proportion of China's new energy passenger vehicles in the global market has continued to increase. According to the China Passenger Car Association, China's new energy passenger vehicles will account for more than 63% of the global market in 2022, 64% in 2023, and 67% in the second quarter of this year.
However, it is probably too early to judge that fuel vehicles will be "out of business". If we extend the timeline, from January to July this year, the sales volume of new energy vehicles was 5.934 million, accounting for 36.4% of the total sales volume of new cars, and fuel vehicles are still the main force in the market.
Positive policies continue to be released
In July 2024, the monthly penetration rate of new energy vehicles exceeded the 50% mark for the first time, reaching 51.1%.
In the early days of new energy vehicle development, such an achievement was unimaginable. At the recently held Fourth Shenyang Intelligent Connected Vehicle Conference, Su Bo, deputy director of the Economic Committee of the 13th National Committee of the Chinese People's Political Consultative Conference, former deputy secretary of the Party Leadership Group and vice minister of the Ministry of Industry and Information Technology, recalled: "When we were formulating the 2012-2020 plan, we proposed to achieve the goal of 'production capacity of 2 million vehicles and cumulative sales of 5 million vehicles' for new energy vehicles by 2020. But at that time, there were still different voices saying that our goal was too high and too aggressive."
Su Bo, Deputy Director of the Economic Committee of the 13th CPPCC National Committee, former Deputy Secretary of the Party Leadership Group and Vice Minister of the Ministry of Industry and Information Technology
Su Bo said that the reason was that in 2012, the sales volume of new energy vehicles in my country was only 12,800, and we were not advanced in the development of new energy vehicles at that time. "However, the State Council's plan in 2012 and the 30 policies on the development of new energy vehicles involving the entire industry chain in 2014 have promoted the ultra-high-speed development of our new energy vehicles. China's new energy vehicles will reach 1.36 million in 2020, 3.54 million in 2021, 7.05 million in 2022, and 9.58 million in 2023. We have formed a new industrial ecology with advanced technology, complete industrial chain, and strong international competitiveness." Su Bo said.
The positive effects at the policy level are still being released to this day.
On August 16, the Ministry of Commerce and seven other departments officially issued the "Notice on Further Improving the Work of Auto Trade-in", and a new round of auto trade-in officially started. The auto trade-in policy has increased the subsidy standard for scrapping and updating. For eligible auto scrapping and updating, the subsidy standard has been increased from the previous 10,000 yuan subsidy for purchasing new energy passenger cars and 7,000 yuan subsidy for purchasing fuel passenger cars to 20,000 yuan and 15,000 yuan respectively, both of which have increased by more than double.
Since March this year, the country has launched a car trade-in campaign, and the policies have gradually been implemented and taken effect, providing impetus for boosting the growth of automobile consumption.
Data from the Ministry of Commerce show that as of 10:00 on August 16, 2024, more than 600,000 applications for automobile scrapping and renewal subsidies have been received, with more than 10,000 new applications per day. From January to July this year, the national automobile recycling volume was 3.509 million, a year-on-year increase of 37.4%. After the implementation of the automobile scrapping and renewal subsidy policy, the number of scrapped vehicles has increased rapidly. Among them, in July, the national automobile recycling volume was 731,000, a year-on-year increase of 93.7%. While the effect of the automobile trade-in policy has gradually emerged, it has also driven the growth of automobile sales. Among them, the growth in sales of new energy vehicles is particularly obvious.
In addition, the State Council pointed out in the "Opinions on Accelerating the Comprehensive Green Transformation of Economic and Social Development" recently issued that low-carbon transportation vehicles should be promoted, and by 2035, new energy vehicles will become the mainstream of new sales vehicles.
Multiple factors stimulate growth
In the fully competitive new energy vehicle market, consumers have more abundant and better choices. Nowadays, the new products launched by automakers are generally concentrated in the field of new energy vehicles. Data shows that in the first half of this year, a total of 11 fuel vehicles were launched in the auto market, 31 fewer than in the same period of 2018, while the number of new energy vehicle models launched was as high as 60, almost 6 times that of fuel vehicles.
Among them, the growth of plug-in hybrid models deserves attention. In July, the sales volume of plug-in hybrid models increased by 80.7% year-on-year, which was much higher than that of pure electric models, becoming the main factor in the current growth of new energy vehicle sales.
The strong growth momentum of the Chinese market has also boosted the performance of the global new energy vehicle market, offsetting the impact of declining demand in Europe. Market research firm Rho Motion released a report saying that global sales of all-electric vehicles and plug-in hybrid vehicles increased by 21% year-on-year in July.
Compared with pure electric vehicles, plug-in hybrid vehicles are favored by consumers due to their high flexibility and long driving range, and have become an important choice for many automakers to adapt to the development trend of the auto market. Take BYD as an example. BYD officially announced that its passenger car sales in July were 340,000 units, a year-on-year increase of 30.5%. The sales of pure electric models were 130,000 units, and the sales of plug-in hybrid models were as high as 210,000 units.
At the user level, the experience of using new energy vehicles is constantly improving. With the improvement of technologies such as batteries, motors, intelligent networking and artificial intelligence, the driving experience of new energy vehicles has become extremely attractive to consumers, especially young consumers.
At the same time, the convenience of electric vehicle charging is also improving. By the end of June this year, the total number of charging piles in China reached 10.244 million, a year-on-year increase of 54%, ensuring the charging needs of 24 million new energy vehicles and bringing more convenience to pure electric travel.
It is worth noting that the development of new energy vehicles is in sync with the rise of domestic brands. In July, the penetration rate of new energy vehicles among domestic brands was as high as 73.9%; the penetration rate of new energy vehicles among luxury cars was 27%; and the penetration rate of new energy vehicles among mainstream joint venture brands was only 8.3%.
At the 4th Shenyang Intelligent Connected Vehicle Conference, Zhang Jing'an, chairman of the China Science and Technology System Reform Research Association and academician of the International Eurasian Academy of Sciences, said when talking about the current development of China's intelligent electric vehicles: "Marketization has enabled many high-tech companies that are not engaged in automobiles to enter this industry, truly forming a cross-disciplinary and multi-departmental integration, so that China's automobile industry has achieved better development."
Are fuel vehicles “out of business”?
Fuel vehicles and new energy vehicles are showing a development trend of one rising and the other falling, which is basically consistent with the current sales performance of joint venture brands and domestic brands.
In the list of domestic automakers' retail sales in July released by the China Passenger Car Association, domestic brands and joint venture brands showed a polarized trend. BYD Auto, Chery Auto, and Ideal Auto all achieved significant growth. Among them, Chery grew by 51.0% year-on-year, the largest increase among the top ten automakers, while Ideal Auto grew by 49.4%, entering the top ten domestic manufacturers for the first time. On the other hand, the sales of joint venture brands declined. The sales of joint ventures such as FAW-Volkswagen, SAIC Volkswagen, GAC Toyota, and Dongfeng Honda all fell sharply.
The monthly sales of new energy vehicles exceeded those of fuel vehicles for the first time, which once again triggered discussions about the imminent decline of fuel vehicles. However, in the view of industry insiders, my country's auto market will continue to show a trend of co-development of fuel vehicles and new energy vehicles in the future.
"From January to July this year, the cumulative market share of pure electric vehicles is 24%, and excluding small cars, the pure electric market is actually declining. The pure electric market segment is not as optimistic as we imagined. The remaining 76%, whether it is extended-range, hybrid or pure fuel, all have engines. Fuel vehicles or cars powered by fuel can still have a long development cycle." Gao Fei, executive vice president of Chery Brand Marketing Center, said that due to different application scenarios and markets, fuel vehicles and new energy electric vehicles do not conflict, and Chery will insist on walking on two legs of oil-electric synergy.
The latest statistics released by the Ministry of Public Security on July 8 show that as of the end of June 2024, the national motor vehicle ownership will reach 440 million, including 345 million cars and 24.72 million new energy vehicles. Fuel vehicles are still the "bulk" of motor vehicle ownership.
At the same time, fuel vehicles are still the choice of many consumers due to their mature technology, low maintenance costs, extensive infrastructure, and low depreciation rate. The "multi-track, multi-brand" competition pattern in the automobile market is becoming increasingly prominent.
Author: Liu Shanshan
