China Business Intelligence Network News: New energy vehicles refer to vehicles that use unconventional vehicle fuels as a power source (or use conventional vehicle fuels and adopt new on-board power devices), integrate advanced technologies in vehicle power control and drive, and form advanced technical principles, new technologies, and new structures.

1、 Definition of New Energy Vehicles

New energy vehicles refer to vehicles that use unconventional vehicle fuels as their power source (or use conventional vehicle fuels and adopt new on-board power devices), integrate advanced technologies in vehicle power control and drive, and form advanced technical principles, new technologies, and new structures. New energy vehicles include four types: hybrid electric vehicles (HEVs), pure electric vehicles (BEVs, including solar powered vehicles), fuel cell electric vehicles (FCEVs), and other new energy vehicles (such as supercapacitors, flywheels, and other high-efficiency energy storage devices).

Data source: Compiled by China Commerce Industry Research Institute

2、 Development policies for the new energy vehicle industry

The new energy vehicle industry, as a national strategic emerging industry, is encouraged and supported at the national level. In recent years, the central and local governments have successively introduced a series of supportive and nurturing policies. Encouragement policies have created conditions for the sustainable development of the new energy vehicle industry in the future, driving the sustained growth of China's new energy vehicle and lithium battery industries. By implementing the policy of supporting the fittest, we actively promote the healthy development of the new energy industry chain, accelerate the upgrading of process technology, and improve safety performance.

Data source: Compiled by China Business Industry Research Institute

3、 The current development status of the new energy vehicle industry

1. Market size

China has become the world's largest market for new energy vehicles. In recent years, the sales growth of new energy vehicles in China has surpassed that of gasoline vehicles. In 2020, the production of new energy vehicles in China was 1.366 million units, with a sales volume of 1.367 million units. From January to September 2021, the production and sales of new energy vehicles reached 2.166 million and 2.157 million respectively, an increase of 1.8 times and 1.9 times year-on-year.

Data source: Compiled by China Commerce Industry Research Institute

2. Sales proportion

From the perspective of segmented energy types, the sales of pure electric vehicles in China reached 1.116 million units in 2020, accounting for 81.6% of the total sales of new energy vehicles; The sales of plug-in hybrid electric vehicles reached 251000 units, accounting for 18.6% of the total sales of new energy vehicles; The sales of fuel cell vehicles reached 1000 units, accounting for less than 0.1% of the total sales of new energy vehicles.

Data source: Compiled by China Association of Automobile Manufacturers and China Business Industry Research Institute

3. Market share situation

At present, the basic competitive pattern has been established within the new energy vehicle industry, and the head effect is prominent. BYD has developed from a traditional car company to a leading enterprise in China's new energy vehicles. Traditional car companies such as Geely, Great Wall Motors, and Guangzhou Automobile Group are striving to catch up, and their market share continues to increase. New car makers such as NIO and Ideal are committed to creating mid to high end models, but they are facing competitive pressure from Tesla's significant price cuts.

From the market share of China's new energy vehicle industry, the market concentration of China's new energy vehicle industry is still at a relatively low level. BYD has the highest market share, reaching 13.4%. Next, Tesla China, SAIC Motor Passenger Vehicle, GAC Aion, Great Wall Motors, Chery, NIO, Ideal, Geely, and Xiaopeng have market shares of 10.1%, 5.6%, 4.4%, 3.9%, 3.2%, 3.2%, 2.4%, 2.1%, and 1.9%, respectively.

Data source: Compiled by China Association of Automobile Manufacturers and China Academy of Commerce Industry Research

In addition, due to the purchase restriction policy, the new energy vehicle market in first and second tier cities has become saturated, and the sinking market below third tier cities is bringing new increments to the rapid development of new energy vehicles. It is expected that lower tier cities will become the focus of competition in the new energy vehicle industry.

4. Financing situation

In the first half of 2021, there were a total of 57 financing events in the new energy vehicle track, involving 50 projects, with a disclosed financing amount of 82.71 billion yuan, of which the number of financing events increased by 42.5% year-on-year.

Data source: Compiled by Qichacha and China Commerce Industry Research Institute

4、 Key enterprises in the new energy vehicle industry

1. BYD

BYD Co., Ltd. (referred to as "BYD") was established in February 1995 and is headquartered in Shenzhen, Guangdong Province. BYD is committed to promoting sustainable development of human society through technological innovation, and helping to achieve the goals of "carbon peak and carbon neutrality". In 2015, BYD won the first award for the new energy industry in the 70 year history of the United Nations - the "United Nations Special Energy Award". In 2020, BYD became one of the top 100 most valuable Chinese brands on BrandZ list, and won the championship of the most valuable Chinese brand in the automotive industry for six consecutive years.

2. SAIC Passenger Car

Shanghai Automotive Group Co., Ltd. Passenger Vehicle Company is a wholly-owned subsidiary of Shanghai Automotive Group Co., Ltd., responsible for the research and development, manufacturing, and sales of SAIC's independent brand automobiles. Since its inception, the passenger car company has relied on the technological, manufacturing, procurement, marketing, and management advantages accumulated through more than 20 years of joint venture cooperation with SAIC Group. With an international perspective, it creatively integrates global advantageous resources, meets consumers' high-end needs with high-quality products and services, and creates an international automotive leading brand owned by the Chinese people with an excellent international cooperation team.

3. Guangqi Ai'an

At the 2020 Guangzhou Auto Show, the GAC Aion brand officially became independent and was renamed GAC Aion from GAC New Energy. GAC Aion (formerly known as GAC New Energy) is a car brand under Guangzhou Automobile Group Co., Ltd. On July 28, 2017, Guangzhou Automobile Group (GAC) announced the official registration and establishment of its new energy brand. The company has initiated the construction of a factory with an initial investment of 4.697 billion yuan and an annual production capacity of 200000 vehicles. In the future, it will collaborate with partners to invest over 45 billion yuan to build the GAC Intelligent Connected New Energy Vehicle Industrial Park.

4. Great Wall Motors

Great Wall Motors is a Chinese automotive brand founded in 1984, headquartered in Baoding, Hebei Province. It mainly produces SUV, sedan, pickup truck, and new energy vehicle models. Great Wall Motors is the first privately-owned automobile company in China to be listed on the H-share market in Hong Kong, the largest SUV and pickup truck manufacturer in China, and a multinational corporation. Capable of independently producing and matching core components such as engines, front and rear axles, and transmissions.

5. Chery Automobile

Chery Automobile Co., Ltd. is a state-owned holding enterprise engaged in automobile production. It was registered and established on January 8, 1997, with its headquarters located in Wuhu City, Anhui Province. The company's strategic goal is to create an "international brand". After 19 years of innovative development, it has become the largest domestic independent brand automobile manufacturing enterprise integrating research and development, trial production, production, and sales of complete vehicles, powertrains, and key components, as well as the largest passenger car export enterprise in China. Chery takes "safety, energy conservation, and environmental protection" as its product development goals, and has successively passed international quality system certifications such as ISO9001 and TUV Rheinland ISO/TS16949.

5、 Development prospects of the new energy vehicle industry

1. Government policies continue to be introduced to support industry development

In order to reduce pollution, improve energy security, and revitalize the domestic automotive industry, the Chinese government has introduced multiple policies to accelerate the development of the new energy vehicle industry. The main incentive policies for the new energy vehicle industry include tax reductions, direct subsidies to automobile manufacturers, consumer subsidies, government mandated procurement, and industry development plans. In addition, the government has introduced a dual credit policy to encourage car manufacturers to produce more new energy vehicles and fewer fuel vehicles, so that the production of new energy vehicles helps car manufacturers earn positive credits. Automakers are required to meet the points threshold every year, otherwise it will result in the suspension of registration or even production of high fuel consuming vehicles. In fact, car manufacturers with insufficient points usually need to purchase points from other car manufacturers because they have not met the threshold. At the same time, the threshold for obtaining licenses for new energy vehicles has been lowered in several major cities where license plates are restricted.

Under the guidance of government policies, the new energy vehicle industry has received tremendous support, with continuously increasing production and broad prospects for industry development.

2. Consumer acceptance of new energy vehicles increases, stimulating industry development

With more and more competitors introducing new energy vehicles, consumers are paying more attention to and willing to accept new energy vehicles. Compared with fuel vehicles, new energy vehicles have lower energy replenishment costs and enjoy favorable policies and subsidies, which has attracted more and more consumers to switch from fuel vehicles to new energy vehicles. In addition, consumers' preference for intelligent interconnection and user centered design can help improve their acceptance of new energy vehicles. In addition, expanding the coverage of charging infrastructure nationwide has improved the driving experience of new energy vehicle consumers and reduced range anxiety, thereby increasing the energy efficiency of new energy vehicles. The related reduction in driving costs also helps consumers continuously improve their acceptance of new energy vehicles and drive market demand in the industry.

3. The development of battery technology and intelligent automotive technology promotes industry progress

The development of power battery technology and the reduction of battery costs will greatly promote the development of the new energy vehicle market. With the advancement of power battery technology, the battery range and charging efficiency of new energy vehicles will be improved, which will continuously increase consumers' willingness to purchase new energy vehicles. In addition, the decrease in battery costs will further narrow the price gap between new energy vehicles with the same configuration and fuel vehicles, making new energy vehicles an economically viable choice for more consumers. In addition, new energy vehicles are considered the best carrier of intelligent technology and are expected to transform into intelligent products controlled by intelligent systems, from simple transportation vehicles to intelligent transportation vehicles. Intelligent networking will bring new development opportunities for new energy vehicles in the automotive revolution, and the industry market size will further expand.

For more information, please refer to the "Research Report on Market Prospects and Investment Opportunities of China's New Energy Vehicle Industry" released by the China Commerce Industry Research Institute. At the same time, the China Commerce Industry Research Institute also provides services such as industry big data, industry intelligence, industry research reports, industry planning, park planning, 14th Five Year Plan, and industry investment promotion.