China's New Energy Vehicle Curve Overtaking

China, the world's largest car market, has long been a valuable market for global car brands. However, with the development of the global automobile industry, more and more new energy vehicles begin to enter the market, which not only means changes in the industry, but also means new opportunities and challenges. This paper will analyze and forecast the current situation, trend, policy and future of China's new energy vehicle market, and discuss the development prospects and challenges of new energy vehicles.

 

Ii. Current situation of the new energy vehicle market

 

1. Market size

 

With the increasing global attention to environmental protection and sustainable development, new energy vehicles have gradually become a hot product in the automobile market. According to the latest data released by the Ministry of Industry and Information Technology, the production and sales volume of new energy vehicles in China in 2019 reached 1.193,500 and 1.1682 million, respectively, up 10.9 percent and 3.1 percent year-on-year. Among them, the production and sales volume of pure electric vehicles were 100.67 million and 975,900, up 11.7% and 2.3% year on year respectively. The production and sales of plug-in hybrid electric vehicles were 186,800 and 192,300, up 4.4% and 6.4%, respectively.

 

2. Market share

 

From the perspective of market share, traditional gasoline cars still occupy a dominant position, but with the rapid development of new energy vehicles, the market share is gradually improving. Statistics show that NEVs accounted for 5.4 percent of the total Chinese auto market in 2019, up 0.4 percentage points year-on-year. Pure electric vehicles accounted for 4.5 percent of the market, while plug-in hybrids accounted for 0.9 percent.

 

3. Brand competition

 

Although China's new energy vehicle market is at an early stage of development, it has already formed some well-known brands. In terms of sales volume, brands such as Tesla, BYD, Nextev, Xiaopang Motor and Trumpchi lead the market. Tesla is particularly strong in China, where it generated more than $3 billion in sales in 2019. In addition, some foreign brands such as Nissan, BMW and Volkswagen are also accelerating their layout in China's new energy vehicle market.

 

Iii. Policy environment of China's new energy vehicle market

 

1. Fiscal subsidy policy

 

Since 2010, the Chinese government began to introduce a new energy vehicle policy with financial subsidies as the main content.

 

By 2019, the government's new energy vehicle subsidy policy has gone through several versions of adjustment, among which the most important changes are:

 

① In 2016, the release of several Opinions on supporting the development of new energy automobile Industry by three ministries, the Ministry of Finance, the Ministry of Industry and Information Technology and the National Development and Reform Commission marked the shift of the policy focus from subsidies to "double credits". The "double points" policy implemented in 2020 will further promote the promotion and development of new energy vehicles.

 

② The release of the New Energy Automobile Industry Development Plan (2021-2035) in 2019 has pushed the new energy automobile policy to a new height. The plan explicitly calls for 25 per cent of sales to be pure electric vehicles by 2025 and 50 per cent by 2035.

 

2. Construction of charging infrastructure

 

The rise and development of new energy vehicles must be supported by a perfect charging infrastructure. The Chinese government has gradually realized this and is ramping up efforts to build charging infrastructure. At the same time, the charging service providers of new energy vehicles are also gradually increasing, such as the famous charging pile brands such as special telephone, China Telecom, Guodian and so on.

 

3. Platform construction

 

Since JD.com released its own plan for new energy vehicles in 2014, some large enterprises have also started to get involved in the field of new energy vehicles. For example, Xiaopeng Automobile has cooperated with Guangzhou Automobile Group, ofo has boldly ventured into the car-sharing sector, and Alibaba is also developing its own new-energy vehicles. All the major enterprises are concerned, accelerate the research and development of application platforms in this field, and explore new cooperation models and service models.

 

Iv. Challenges in the new energy vehicle market

 

1. Market demand is too dependent on policy

 

The rapid development of the new energy vehicle market has largely benefited from the support of policies. The government has lowered the cost of buying new energy vehicles and increased consumers' willingness to buy them through measures such as fiscal subsidies and the construction of charging infrastructure.

 

However, too much reliance on policy will not ensure the long-term sustainable development of the market, and will put additional pressure on government finances. Therefore, promoting the standardization and marketization of the new energy vehicle market is a development goal that must be pursued.

 

2. Insufficient charging infrastructure construction

 

The core advantage of new energy vehicles lies in environmental protection and energy saving, but the ensuing problem is the lack of charging infrastructure construction, especially in the infrastructure construction of the rapid development of cities.

 

To solve this problem, the government can optimize subsidy policies, lower the threshold of charging pile construction, support charging pile enterprises to speed up the layout and promote the construction of charging infrastructure.

 

3. Technological innovation and cost control

 

New energy vehicles are the "panda" in the automobile industry. There are still many technical problems to be solved, such as driving range, charging speed, weight and cost, which need to be further improved.

 

In addition, cost control is also a problem in the development of the new energy automobile industry. Compared with traditional vehicles, the cost of new energy vehicles is relatively high, so any enterprise in the development of this field, need to work hard in terms of cost control.

 

V. Prospects of the new energy vehicle market

 

1. The growth of market size

 

As global environmental awareness increases, the size of the new energy vehicle market will grow significantly. According to the latest data from the Ministry of Industry and Information Technology, China's new-energy vehicle sales may reach 3 million by 2025, of which 1.3 million are expected to be pure electric vehicles and 1.7 million are expected to be plug-in hybrid electric vehicles.

 

2. Further development of battery technology

 

The development of battery technology is the key to the development of new energy vehicles.