This article is from WeChat public account: China Economic Weekly (ChinaEconomicWeekly) , author: Chendong Dong, from FIG title: FIG insect
“I also announce here, everyone is worried, (New Energy Vehicle Subsidy) Regression on July 1 last year. Everyone rest assured, There will be no further decline on July 1st this year. “On January 10-12, the annual China Electric Vehicles Hundred People’s Association Forum was held in Beijing, and the topic of subsidized declines mentioned by Minister of Industry and Information Technology Miao Wei in his keynote speech received much attention .
Soon, the above news swept the WeChat circle of friends on the weekend, and the reading volume of Weibo on this topic quickly rose to ten million. “This is a big plus. Many brokerage analysts have no rest on the weekend and urgently hold an analysis meeting on new energy vehicles and the Tesla industry chain.” A brokerage source told China Economic Weekly.
Ministry of Industry and Information Technology clarifies: the subsidy “will not fall significantly”
Wan Gang, vice chairman of the National Committee of the Chinese People’s Political Consultative Conference and chairman of the Chinese Association of Science and Technology, first mentioned the topic of “subsidy subsidence” on the forum.
Wang Gang mentioned in the keynote speech that the central and local fiscal decline in 2019 has exceeded 70%. (He) feel no more Formulate an intermediate subsidy policy, and do not make new adjustments to the subsidized products and technical indicators. Let enterprises spend more time and energy on product planning and research and development after the withdrawal, so as to better meet market requirements.
“Subsidies in 2020 will still be implemented in the second half of 2019, definitely less than the money spent in 2019, but don’t change anymore. It has already lost money, allowing everyone to continue for a period of time.” Chairman, China Automotive IndustryDong Yang, the former secretary general of the industry association, also appealed.
The Minister of Industry and Information Technology Miao Wei made the above response to the “new energy vehicle subsidy decline”. Miao Wei also mentioned that in the long run, China’s new energy vehicle industry already has a good scale advantage and development environment. In the future, it will continue to adhere to the national strategy of developing new energy vehicles, and consolidate and develop the hard-won good momentum. He also said, “We will work with relevant authorities to further study and evaluate the subsidy policy for new energy vehicle subsidies.”
The new energy vehicle subsidy policy is considered as the “engine” for the rapid development of new energy vehicles in China.
Since 2009, the central government has begun to vigorously support the promotion and application of new energy vehicles. Driven by various favorable policies, especially the new energy vehicle purchase subsidy policy, China’s new energy vehicle production and sales have grown rapidly. In 2018, the production and sales reached 1.27 million and 1.256 million, an increase of 59.9% and 61.7% year-on-year.
Obviously, subsidies are not a long-term solution, and policy makers know it.
On March 26, 2019, the Ministry of Finance issued the “Interpretation on Further Adjusting and Perfecting New Energy Vehicle Subsidy Policies” (hereinafter “Interpretation”) mentioned that the subsidy for new energy vehicles will be increased and the decline will be in place by the end of 2020. “Interpretation” mentioned that in accordance with the system of subsidy withdrawal after 2020, adopt the method of releasing the adjustment pressure in stages, that is, the subsidy standard for 2019 will decline by an average of 50% on the basis of 2018 and will be in place by the end of 2020.
Industry analysis, according to this “interpretation”, new energy vehicle subsidies will further decline in 2020. However, according to Minister Miao Wei ’s statement, the rate of subsidy decline may slow down, leaving room for the new energy vehicle industry to cope with the downturn of the industry, which is a major positive for the new energy vehicle industry.
However, the general trend of subsidy decline may not change, which is also confirmed from the General Office of the Ministry of Industry and Information Technology.
The relevant person in charge of the General Office of the Ministry of Industry and Information Technology responded to the reporter of “China Economic Weekly” that Minister Miao Wei said at the China Electric Vehicle Hundred People Conference on January 11 that electric vehicle subsidies after July 1 this year “will not decline.” It should be “will not descend significantly.” “Relevant responsible comrades of the Department of Equipment and Equipment made clarifications, and relevant media have released.”
Whether it is “not going back downhill” or “not going back down sharply”, industry analysts have one thing to be sure of, which is the new energy vehicle subsidy policy.The policy will remain stable for a period of time, and by the end of 2020, the “subsidy subsidy in place” may not even be realized. “During the development of China’s new energy automobile industry, relevant supporting policies, especially financial subsidy policies, have played a very important role in cultivating the consumer market and driving the development of the industry.” The responsible person of the Ministry of Industry and Information Technology also affirmed the positive role of subsidies.
New energy vehicle market is expected to repair after diving
2019 is seen as a turning point for the new energy vehicle industry. In 2018, the sales of new energy vehicles was still the only bright spot to boost the Chinese auto market. The annual sales reached 1.256 million units, a year-on-year increase of 61.7%. In each market segment, new energy vehicles stand out.
The new energy vehicle market in 2019 is shrouded in the downward shadow.
On January 13, data released by the China Automobile Industry Association showed that the production and sales of new energy vehicles in 2019 were 1.242 million and 1.206 million, a year-on-year decrease of 2.3% and 4.0%. Among the main varieties of new energy vehicles, the sales of pure electric vehicles declined slightly, and the production and sales of plug-in hybrid vehicles showed a significant decline.
In December 2019, the year-on-year decline in the production and sales of new energy vehicles is still significant. In December, sales of new energy vehicles were 163,000, a year-on-year decrease of 27.4%. Among the main varieties of new energy vehicles, the production and sales of pure electric vehicles and plug-in hybrid vehicles still fell year-on-year.
The subsidy decline is considered to be one of the main reasons for the decline in new energy vehicle sales. In 2019, due to the macroeconomic pressure, the transition of National V fuel vehicles to National VI brought a period of confusion, and related support policies, especially the subsidy policy’s decline, affected by multiple factors. The month began to decline.
In fact, with the rapid expansion of the new energy vehicle industry, the role of the “double-edged sword” in subsidy policies has become more apparent. On the one hand, fiscal policy has a positive guiding and leveraging role in promoting the innovative development of the new energy vehicle industry. On the other hand, the long-term implementation of subsidy policies has led to the formation of “subsidy dependency” for some auto companies, and their industrial competitiveness is not strong. To this end, the competent authorities have been trying to strengthen the role of non-subsidy policies and encourage new energy vehicle consumption.
For example, non-subsidized measures such as unlimited travel, exemption from purchase, and convenience of listing on the market have played an important role in expanding new energy vehicle consumption. In addition, in order to encourage the consumption of new energy vehicles, starting from 2019, the new policy provides for meeting the requirements of automotive product announcements but not meeting them.Products with subsidized technical thresholds are included in the catalog of recommended models.
New Energy Vehicle Industry Development Plan (2021-2035) published on December 3, 2019 (Draft for Comment) It is proposed that by 2025, the sales volume of new energy vehicles will reach about 25%. To this end, the consultation draft is “very powerful” in terms of “safeguard measures”: starting from 2021, all new or updated vehicles in the public domain of the National Ecological Civilization Experimental Zone and key areas for air pollution prevention and control use new energy vehicles. This largely ensures market demand.
“At present, the plan has basically taken shape, and it has been open to the public for comments. We strive to complete the formulation and release of the plan in the first half of this year, so that it can be integrated with the previous plan.” Further improve the double-point policy and promote the implementation of policies that promote automobile consumption.
From a global perspective, in the past year, major multinational companies in developed countries such as Europe, the United States, Japan, and South Korea have announced their strategic goals for electrification. They will launch a variety of electrified cars. The pace is accelerating and entering a state of fierce competition. The Chinese market is favored by these multinational companies.
“When the cost of new energy vehicles drops and subsidies are no longer needed as a support, China’s new energy vehicle market will usher in a large-scale outbreak.” Dong Yang predicts that the time when the domestic new energy vehicle market will break out on a large scale Arrived two years later, but it is not yet possible to predict to what extent this scale will be reached.
This article is from WeChat public account: China Economic Weekly (ChinaEconomicWeekly) , author: Chendong Dong