Sales of New Energy Vehicles Shocked sharply after Subsidies Depressed, Marketization Transition of New Energy Vehicles Filled with Variables

 Sales of New Energy Vehicles Shocked sharply after Subsidies Depressed, Marketization Transition of New Energy Vehicles Filled with Variables

Our reporter Gong Mengze

Just one month after the implementation of the new energy subsidy policy in 2019, the sales data of new energy automobiles of various automotive enterprises showed a year-on-year decline.

In this regard, Assistant Secretary-General Chen Shihua pointed out that the profit margin of most new energy vehicles is significantly lower than that of traditional fuel vehicles.

With subsidies falling sharply, it will be difficult for many new energy automobile companies to make profits. If the price of new energy vehicles does not rise in the second half of the year, many car companies will face an embarrassing situation of loss. Rising prices are facing market pressures, and the new energy vehicle market is full of variables in the second half of the year.

Cui Dongshu, Secretary-General of the Federation, told the Securities Daily that 2019 was a real downhill period for Chinas new energy automobile subsidy policy. Especially in July, when the new energy automobile subsidy declined sharply and comprehensively, the local subsidy did not link up with the support policy of the use link after the withdrawal of the new energy automobile subsidy. Facing the possibility of hard landing.

Low Level Operation of the Whole Vehicle Market in July

On August 12, the China Automobile Industry Association released the latest production and marketing data of the passenger car market in China. According to the data, in the first seven months of this year, automobile production and sales were 13.933 million and 14.132 million, down 13.5% and 11.4% from the same period last year. The market is still in a low position. In July, the production and sales of automobiles in China were 1.8 million and 1.08 million respectively, down 11.9% and 4.3% from the same period last year. In July, the decline of automobile sales narrowed down.

According to Chen Shihua, China entered the off-season of traditional automobile sales in July, with 1.8 million and 1.08 million automobiles produced and sold in that month, down 5% and 12.1% annually, 11.9% and 4.3% year-on-year. At present, although the overall decline in production and marketing continues to narrow, the overall decline in production and marketing in the industry has not fundamentally changed.

In the most concerned passenger car sector, sales totaled 1.528 million vehicles in July, down 3.9% from a year earlier. Although the SUV model ended its decline for several months in July, it grew by 6.4% year-on-year. However, the market share of Chinese brands declined further due to the repeated failure of SUV market. In July, the market share of Chinese brand passenger cars was only 36.2%. Since then, the market share of Chinese brand passenger cars has been below 40% for four consecutive months.

In response, Xu Haidong, Assistant Secretary-General of the China Automobile Association, said that from January to July, Chinas automobile production and sales are still at a low level. He predicted that with the introduction of a series of relevant national policies and the increasing number of six models, consumer wait-and-see sentiment is expected to improve.

Sales fell sharply after the subsidy receded

In particular, in July, new energy vehicles showed a rare negative growth, with sales of only 80,000 vehicles, down 4.7% year-on-year. Among them, sales of new energy passenger vehicles dropped 12.5% year-on-year and 12.9% year-on-year, while sales of pure electric passenger vehicles reached 48,000, down 58.3% year-on-year and 4.2% year-on-year. ?

Xu Haidong believes that the decline in sales of new energy vehicles is mainly due to the decline in subsidies. It is understood that according to the announcement issued jointly by the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology and the Development and Reform Commission on March 26, the subsidy standard for new energy vehicles will decline by 50% on average from June 26 on the basis of 2018. For this reason, most automobile enterprises have adopted the practice of rushing to license before the implementation of the policy, resulting in a concentration of sales in June. Volume, to a certain extent, overdrawn the sales level in July.

As the heart of new energy vehicles, its sales performance has become a barometer of the installed capacity of power batteries. According to the statistics of Research Department of Power Battery Application Branch, in July 2019, the installed capacity of power batteries for new energy vehicles in China was about 4.7 GWh, which increased by 40.5% year on year, but the ring ratio decreased by 29%. Among them, the installed capacity of new energy passenger vehicles is about 2.2 GWh, with a drop of 54% in the ring ratio.

The growth of new energy automobile sales in June is relatively large, if we look at the market in recent months on average, it is still showing a higher growth. Xu Haidong believes that although CAAC has adjusted its annual sales target of new energy vehicles from 1.7 million to 1.5 million, the growth rate is still very high. Judging from the trend of the market, it is expected to maintain high growth in the second half of the year.

It is worth mentioning that according to the previous Beijing-Tianjin-Hebei and the surrounding areas in 2017 air pollution prevention and control work program shows that in the future, all new taxis in Beijing should be replaced by electric vehicles, and other cities will actively promote the replacement of taxis into electric vehicles or new energy vehicles.

According to other data, southern cities such as Shenzhen, Guangzhou and Hainan are also actively carrying out taxi electrification. This year, the proportion of pure electric taxis in Shenzhen has reached 99.06%. In this regard, the industry generally believes that the electrification of taxis and other public vehicles is essential to boost sales of new energy vehicles, and taxi groups may become the next target for new energy vehicle enterprises.

Source: Liable Editor of Securities Daily: Yao Liwei_NT6056