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Cao Chen/Photography, Zhai Chao/Mapping

Securities Times reporter Cao Chen

Since the beginning of the summer vacation, the electric two-wheeled vehicle market has entered its traditional peak season.

Recently, a reporter from the Securities Times visited the Tianjin manufacturing base of Emma Technology and found that the factory was working at full capacity to increase production in order to meet the surge in market demand. At the same time, many brand stores such as Ninebot and Niu Electric also ushered in a peak sales period. This situation of strong supply and sales not only reflects the strong market demand, but also indicates that the electric two-wheeled vehicle industry may usher in a new round of growth.

Industry insiders told reporters that although the market share of electric two-wheeled vehicles is high, there is a huge demand for replacement, especially the replacement of smart models has gradually become a new trend. However, overall, the process of intelligence is still in its early stages, and the driving range is the core selling point of many brands. Looking to the future, with the technological innovation and progress of major brands, intelligence is expected to become a new growth in the industry. In addition, since the beginning of this year, the intensive introduction of policies will also promote the more standardized development of the industry, and the market share of leading companies is expected to continue to increase.

Market supply and sales are booming

The Tianjin Manufacturing Base of Aima Technology is located in Jinghai Modern Ecological Industrial Park. It is the largest of the eight production bases of Aima Electric Vehicles in the country. It integrates R&D center, manufacturing, warehousing and logistics, and has precise welding, injection molding, spraying and assembly technologies.

Recently, a reporter from Securities Times visited the Tianjin manufacturing base of Emma Technology and saw a busy and orderly production scene. The machines in the production workshop were roaring, and the workers were busy with wiring, assembly, security inspection and other work in an orderly manner on the assembly line. "At present, it is the peak season for the two-wheeled electric vehicle market, and the factory has been running at full capacity to meet market demand." The workshop staff told reporters that the Tianjin manufacturing base has a total of 15 assembly production lines.

In fact, the Tianjin manufacturing base can be regarded as a microcosm of Emma's factories in many places running at full capacity. The relevant person in charge of the company told reporters that recently, Emma's new Huangyan factory has also been put into production and has entered full-load production. In terms of overall production capacity, by the end of 2023, Emma Technology's annual production capacity will reach 10.6 million vehicles. New bases in Chongqing, Lishui, Guigang, Lanzhou and other places are under construction, and bases in Southeast Asia are also under construction. The company's production capacity is expected to increase further, and the annual production capacity is expected to exceed 20 million vehicles when fully reached.

In addition to the busy scenes on the production lines, many brands of two-wheeled vehicle stores have also ushered in a sales peak. Recently, a reporter from the Securities Times visited the stores of brands such as Ninebot and Niu Electric and found that consumers were coming in an endless stream, and "huge increase in store sales" has become the keyword in the current market.

Outside a Ninebot store in Beijing, the reporter saw a variety of novel two-wheeled vehicles on display at the door. Many consumers were consulting in the store, and sales staff were busy shuttling between them, introducing products or providing test drive services. The sales staff in the store revealed to the reporter that since the second quarter, the industry has gradually entered the peak sales season. "Especially during the summer vacation, the number of students buying electric vehicles has increased significantly, and the weather is getting cooler, making riding more comfortable. Our store sold 18 electric vehicles in one day yesterday. Ninebot focuses on intelligence, and all models can be opened without a key."

Listed companies performed well

Since the second quarter, the electric two-wheeled vehicle industry has shown a strong supply and demand situation, and this trend is also reflected in the semi-annual reports of listed companies.

On the evening of August 22, Emma Technology released its financial report showing that its operating income in the second quarter was 5.637 billion yuan, a year-on-year increase of 18.07%; its net profit was 467 million yuan, a year-on-year increase of 12.06%. The day after the financial report was released, the company's stock price soared by more than 7%.

CFMOTO, which has just "squeezed into" the electric two-wheeler track, has also performed well. On August 15, CFMOTO released a financial report showing that in the first half of the year, the AE4 series of Jihe electric two-wheelers received continuous orders as soon as they were first launched, with strong market performance, an 81% increase in domestic channels and a 181% increase in international channels. In the first half of the year, a total of 20,400 Jihe electric vehicles were sold, with sales revenue of 116 million yuan. CFMOTO stated in its financial report that benefiting from the wide range of application scenarios of electric two-wheelers, they can be used as a good supplement to cars to solve family travel needs in the case of increasing urban congestion. At the same time, commercial demand continues to grow, including shared bicycles, food delivery riders, express delivery, etc., and the demand for electric two-wheelers is still relatively strong.

The latest financial reports released by Ninebot and Niu Electric, which focus on the mid-to-high-end market, also show strong industry demand. On August 12, Niu Electric released a financial report showing that in the second quarter, the company's vehicle sales were 256,200 units, a year-on-year increase of 20.8%; operating income was 940 million yuan, a year-on-year increase of 13.5%. In this regard, Niu Electric said that this was mainly due to the rapid increase in vehicle sales and the contribution of overseas markets.

Ninebot's vehicle sales were even more impressive. On August 6, the company released a financial report showing that its smart electric two-wheeler business continued to grow rapidly in the first half of the year, with sales in China reaching 1.1984 million units, a year-on-year increase of 123%; driving sales revenue of 3.335 billion yuan, a year-on-year increase of 119%. As of the first half of the year, there were more than 6,200 electric two-wheeler specialty stores in China, covering more than 1,100 counties and cities.

"Electric two-wheeled vehicles are cost-effective means of transportation and are also a necessity for many people. The improvement in sales this year is due to increased travel demand, improved charging facilities, improved vehicle experience, and a concentrated outbreak of demand from residents and food delivery. These factors have led to strong supply and demand in the industry. Looking ahead, the electric two-wheeled vehicle industry is expected to maintain a high level of prosperity." Pan Helin, a member of the Information and Communications Economics Expert Committee of the Ministry of Industry and Information Technology, told a Securities Times reporter.

Intelligence will bring new growth

In recent years, the market share of electric two-wheeled vehicles in my country has reached a relatively high level, but it has become a consensus that there is a large space for replacement demand, which is also a major background for the continuation of the high prosperity of the industry.

According to data from the China Bicycle Association, the number of electric two-wheelers in China will exceed 400 million in 2023. If calculated based on the number of households nationwide, every five households own about four electric two-wheelers. According to Deloitte data, 62.1% of the consumer demand for electric two-wheelers in 2024 will come from replacement demand.

During the interview, the reporter found that the intelligence of electric two-wheeled vehicles has attracted more and more attention from consumers and has gradually become an important factor in promoting the growth of the replacement market.

"Most of the people who come to our store to buy cars are young people, and they are particularly interested in smart functions. Many customers are not buying electric cars for the first time. Some of them are buying because the current car computers cannot keep up with the performance, and some want to replace them with new smart models. This demand for replacement of smart car computers has greatly increased the store's sales." The above-mentioned No. 9 store salesperson told reporters.

According to iResearch Consulting survey data, more and more users will consider intelligent configuration when purchasing two-wheeled vehicles from 2022 to 2023; survey data in 2023 showed that 46.6% of users purchased two-wheeled vehicles to supplement other means of transportation, and intelligent innovation can better meet the "decent" cost-effectiveness needs of car owners.

A relevant person in charge of Ninebot told a reporter from Securities Times that since 2019, driven by the new national standard, the market has seen huge replacement demand, driving the industry to form new growth, but this wave of growth is gradually coming to an end. The industry is currently in the stage of transforming traditional feature phones to intelligent ones. This wave of demand for intelligent replacement and upgrading has just begun and may become a new growth in the future development of the industry.

However, many industry insiders believe that the electric vehicle industry is still in the early stages of intelligence, and technological innovation is becoming the key to competition among major leading companies. Li Zhe (pseudonym), an executive of a two-wheeled vehicle company, told reporters that the key to increasing profits for two-wheeled electric vehicle brands lies in occupying the high-end market, and intelligent innovation is opening up new demands. At present, the selling point of the high-end market is mostly focused on endurance. Looking to the future, innovative design and intelligent technology will be the key to enhancing market competitiveness. Overall, the market development potential of intelligent high-end is huge.

"At present, the intelligence and high-end level of the two-wheeled electric vehicle industry is constantly improving. For example, more and more models are equipped with functions such as GPS positioning, remote control, smart locks and mobile phone interconnection. In the future, technological innovation will be the core of the industry's development, and major brands will continue to explore more efficient and safe battery technology and a richer smart ecosystem." Niu Electric told the Securities Times reporter.

Industry concentration will increase

In fact, the rapid development of the electric two-wheeled vehicle industry has benefited from the continuous guidance and support of policies. Since the beginning of this year, with the intensive introduction of a series of relevant policies, the industry is expected to usher in a more standardized development, and it has become a consensus that the market concentration will continue to increase.

Specifically, on April 25, the State Administration for Market Regulation issued the mandatory national standard "Safety Technical Specifications for Lithium-ion Batteries for Electric Bicycles"; on April 30, the Ministry of Industry and Information Technology and three other departments issued the "Electric Bicycle Industry Standard Conditions" and "Electric Bicycle Industry Standard Announcement Management Measures" to strengthen the management of my country's electric bicycle industry, standardize corporate production and operation behaviors, and improve product quality.

It is understood that my country is a major producer and consumer of electric bicycles in the world. At present, the number of electric bicycles in China has reached 350 million, and electric bicycles have become an important means of transportation for people to travel short distances. At the same time, the electric bicycle industry is also facing problems such as low industrial concentration, weak innovation and R&D capabilities of enterprises, and insufficient quality assurance capabilities, and needs to further improve the quality and level of development.

"With the release of the 'Electric Bicycle Industry Standard Conditions' and the 'Safety Technical Specifications for Lithium-ion Batteries for Electric Bicycles', higher requirements are placed on the technical standards of products. Companies must continuously upgrade their technology to comply with new national regulations. In this process, small and medium-sized enterprises that do not meet the standards may face elimination, and market share will be concentrated in leading companies that meet the standards." A relevant person in charge of Emma Technology told reporters.

In addition to a number of regulatory policies, the "trade-in" of two-wheeled vehicles has also been clarified by high-level departments recently. On July 25, the National Development and Reform Commission and the Ministry of Finance issued a notice on "Several Measures to Strengthen Support for Large-Scale Equipment Renewal and Trade-in of Consumer Goods", proposing that about 150 billion yuan of ultra-long-term special treasury bonds will support the trade-in of consumer goods, including electric bicycles.

The revision of the "new national standard" for electric bicycles, which has attracted much attention in the industry, has also made important progress. On July 28, the Electronic Standards Institute of the Ministry of Industry and Information Technology conducted a questionnaire survey on the revision of the "Electric Bicycle Safety Technical Specifications", and conducted an open survey on issues such as the weight, speed, endurance, whether electric bicycles are equipped with pedals, and whether they can carry passengers.

In this regard, Kaiyuan Securities analyzed that it is expected that the revision of the new national standard will focus on battery safety and vehicle quality. The overall direction puts battery safety and flame retardancy in an important position, which is conducive to better implementation of the provisions of the "New National Standard" and stimulates market demand for replacement. At the same time, the addition of regulations such as the installation of Beidou modules and communication systems may increase the production cost of the whole vehicle, raise the industry entry threshold and accelerate the clearance of small and medium-sized brands.

"The introduction of relevant policies will promote the improvement of industry quality and achieve standardized long-term development." Li Zhe told reporters that as supervision becomes more detailed, the industry development will also become more standardized. In this process, the industry will accelerate the clearance and the industry concentration will usher in a significant increase, which will have a positive significance for improving the overall quality of the industry. However, in the R&D and manufacturing links, relevant companies still need to increase R&D investment to better meet user experience and needs.