New energy vehicles: European sales broke out and domestic popularity may not be far away

Affected by the epidemic in the first half of 2020, global consumption has been sluggish, and the auto market has been in a long-term downturn. Recently, European new energy vehicle sales have suddenly risen, becoming the world's largest new energy vehicle market in one fell swoop.

According to the latest data from the European Automobile Manufacturers Association (AECA), in September, sales of new energy vehicles in nine countries including Germany, the United Kingdom, France, Norway, Sweden, Portugal, Italy, Switzerland, and Spain continued to increase, with a total of 133,000 registered vehicles, a year-on-year increase 195%.

Among them, Norway's electrification progress is very exaggerated. At present, the market share of new energy vehicles in Norway has reached 81.6%, and the market share has increased by nearly 15% in only one year. The best-selling products include the new Volkswagen ID.3, Tesla Model 3 and Polestar2, while the ICE internal combustion engine is squeezed to 11.1% of the market share

So, why can European new energy vehicle sales soar?

Zheng Yun, a global senior partner of Roland Berger Management Consulting, said in an interview recently that the current development of the European new energy vehicle market is mainly driven by two types of government-provided incentives and carbon emission restrictions.

First of all, European new energy vehicle subsidies are strong. For pure electric vehicles, the subsidy amount per vehicle in Germany and France is as high as 6,000 euros. If calculated at 40,000 euros per vehicle, it is equivalent to a 15% discount. Summarizing the policies of various countries, on the whole, pure electric vehicles priced below 45,000 euros are basically subsidized, but models above 60,000 euros are not subsidized in most countries.

Second, the EU's strict carbon emission penalties have accelerated the popularity of new energy vehicles. In April 2019, the European Union issued the "2019/631 Document", stipulating that the CO2 emissions of newly registered passenger cars in 2025 and 2030 will be reduced by 15% (81g/km) and 37.5% (59g/km) on the basis of 2021 (95g/km) respectively. g/km), a fine of 95€ for every 1g/km exceeding the standard. According to ICCT, the actual carbon emissions of passenger cars in the European Union dropped from 169g/km in 2001 to 122g/km in 2019, a cumulative decrease of 27.8%. From this point of view, the penalty system has begun to bear fruit.

In addition, Tesla’s new models were released, and Volkswagen’s MEB platform specifically designed for electric vehicles was delivered. The high-speed electrification transformation of mainstream auto companies has provided a guarantee for the supply of new energy vehicles.

According to Markline statistics, the global sales of new energy passenger vehicles (BEV+PHEV) in the first half of 2020 were 974,000, of which China, the United States, the European Union, Japan, and other countries accounted for 33.5%, 11.8%, 34.7%, 1.3%, 18.8%. The market share of the EU region increased sharply in the first half of 2020, from 21.9% in 2019 to 34.7% in the first half of 2020, and its market share surpassed China. The first-mover advantage in China is shrinking, with its market share falling from 50.2% in 2018 to 33.5% in the first half of 2020.

With the rapid development of new energy vehicles in Europe taking the lead, can China seize opportunities and meet challenges?

In terms of policy, my country has not only imposed restrictions on fuel consumption, the new energy credit standards have also become stricter, and the subsidy policy originally planned to withdraw in 2020 will be extended by two years to 2022. In May 2017, the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Science and Technology issued the "Medium and Long-term Development Plan for the Automobile Industry", which clearly stated that by 2020, the average fuel consumption of new cars will be reduced to 5.0L/100km, and the fuel consumption of energy-saving vehicles will be reduced to Below 4.5L/100km; by 2025, the average fuel consumption of passenger cars will drop to 4.0L/100km (about 95g/km). In April 2020, the Ministry of Finance, the State Administration of Taxation, and the Ministry of Industry and Information Technology jointly issued the "Announcement on the Policies Concerning the Exemption of Vehicle Purchase Tax on New Energy Vehicles". From January 1, 2021 to December 31, 2022, new energy vehicles purchased Exemption from vehicle purchase tax.

Driven by a series of policies, my country's new energy automobile industry has made certain progress.

In terms of technology, the endurance and power consumption of new energy vehicles have been significantly improved, which greatly alleviates the problem of mileage anxiety. According to the Ministry of Industry and Information Technology's recommended catalog statistics, the average cruising range of pure electric passenger models in the first batch of recommended catalogs in 2017 was only 211.6km, while the seventh batch in 2020 has been increased to 391.4km, an increase of 85.0%. According to the statistics of the Ministry of Industry and Information Technology’s exemption catalogue, the average power consumption per unit load of 100 kilometers of pure electric passenger vehicles in my country has dropped from 12.7 Wh/100km*kg in the first batch of exemption catalogues to 8.6Wh/100km*kg in the 25th batch, a year-on-year Reduced by 32.3%, the energy saving effect is remarkable.

Coupled with the advancement of the power swap mode of new energy vehicles, power station swaps have been paid more attention and the infrastructure has become more complete. The research team of Evergrande Research Institute stated in the China New Energy Vehicle Development Report, “On the one hand, battery swapping can greatly shorten the recharge time of new energy vehicles. On the other hand, it can reduce the charging rate and improve the charging safety. The initial purchase cost of the car owner and the increase in the residual value rate of the vehicle can solve many of the current pain points faced by new energy vehicles to a certain extent."

It is worth noting that some core components of new energy vehicles are monopolized by foreign countries, the most typical being IGBT. IGBT is the core key component of electronic control, which plays a role of power conversion. The cost accounts for nearly 50%. The industry can be called the "CPU" of the automotive power system. However, my country's motor controller technology is relatively backward, and the core component IGBT imports account for The ratio exceeds 90%. According to the prospectus of the domestic IGBT leader, Star Semiconductor, in the global IGBT supplier market share ranking in 2017, only one of the top 10 domestic suppliers, ranked last, only 2%. In today's severe international situation, the localization of core products is particularly important.

In the current epidemic environment, the low demand has led to a decline in the overall sales of the new energy vehicle industry. In the first half of the year, the sales of new energy passenger vehicles were only 313,000, a year-on-year decrease of 44%. The future development prospects of new energy vehicles will still be affected by the macro economy. If the policy falls short of expectations and the epidemic intensifies, the downturn of new energy vehicles will be prolonged.

Shanxi Securities said that under the demonstration effect of high-quality models, it is expected to accelerate the popularization of electric vehicles, cost optimization, and the localization of core components, which will drive the benefit of the industry chain.

A private equity fund investment manager believes that “the global new energy vehicle market will further increase its volume. The overall industrial chain has great potential for development, but the implementation of policies and infrastructure construction will take time. The outbreak of domestic new energy vehicles will at least In 1-2 years, the current domestic leading companies continue to promote technological development, and solving user pain points is the key."