Quality Anxiety Behind the Hot Trend of New Energy Vehicles

The much-anticipated “double points” policy for new energy vehicles has finally been settled amidst the commotion. In the "Measures for the Parallel Management of Passenger Vehicle Enterprise Average Fuel Consumption and New Energy Vehicle Points" officially issued by the Ministry of Industry and Information Technology, the enterprise average fuel consumption of enterprises selling passenger vehicles in China (including imported passenger vehicle enterprises) ( CAFC) and new energy passenger vehicle production (NEV points) will be assessed by points. This policy will be officially implemented on April 1, 2018.

The introduction of the "double points" policy directly prompted domestic independent car companies and joint venture car companies to launch new energy vehicle projects. On the one hand, people can see the enthusiasm of car companies to develop new energy vehicles; on the other hand, the great leap forward development of new energy vehicles by car companies also makes people feel a little anxious.

Competition heats up

There is no doubt that new energy vehicles are an inevitable trend in the development of the automobile industry. Based on this, my country's auto companies have adjusted their corporate development strategies. "The global automobile industry ecology is being restructured, and electrification, intelligence, and connectivity are accelerating. The Ministry of Industry and Information Technology has begun to study and formulate a timetable for stopping the sale of traditional energy vehicles." Xin Guobin, Vice Minister of Industry and Information Technology, said in the "2017 China Automobile Industry Development ( These remarks at the TEDA International Forum set off a "huge wave" in the domestic automobile circle. Since the news of the "ban on the sale of traditional fuel vehicles" came out, major car companies have accelerated the layout and construction of the new energy vehicle sector.

Previously, Volkswagen, one of the top three German companies, said that by 2020, the Volkswagen Group is expected to sell a total of 400,000 new energy vehicles in China; by 2025, it will provide Chinese consumers with approximately 1.5 million new energy vehicles. Most of them are locally produced pure electric vehicles.

Mercedes-Benz is actively responding to my country's policies. Daimler CEO Zetsche said that the company will launch electric versions of all models by 2022, and Mercedes-Benz will offer at least 50 hybrid and pure electric models and their derivatives by then. At the same time, Daimler's sub-brand Smart will also complete the transition to electrification by 2022.

In addition, Volvo also recently stated that it will only produce hybrid vehicles and pure electric vehicles starting in 2019. Jaguar Land Rover also stated that by 2020, all vehicle products will have pure electric or hybrid versions.

Not only foreign car companies, but also domestic car companies are no exception. BYD has already completed its layout of the new energy vehicle sector, and Geely and Jianghuai have also increased their investment in new energy vehicles. According to official information from JAC, JAC plans to complete the sales target of 200,000 new energy vehicles by 2020, and its new energy sales target will account for 30% of total sales in 2025.

In addition, Volkswagen teamed up with Jianghuai to produce new energy vehicles; Ford signed a memorandum with Zotye to plan to establish a joint venture to develop, manufacture and sell pure electric vehicles; Renault-Nissan and Dongfeng Motor Group established a new energy vehicle company to produce new energy vehicles... Joint ventures and cooperation in the field of new energy vehicles are also in full swing. Competition in China's new energy vehicle market is also becoming increasingly fierce.

The overall level of battery technology lags behind

Looking at the entire industry, there are many companies that have been driven to the shelves by the "double points" policy and passively develop new energy vehicles. Some companies are rushing to release new energy models, and some companies are buying low-speed electric vehicles. However, can such a hasty response produce high-quality new energy vehicle products? Once low-quality products enter the market, consumers' interests will be infringed, which is not conducive to the promotion and development of new energy vehicles.

Take the battery, a key component of new energy vehicles, as an example. Among the self-owned brand car companies that have made a difference in the field of new energy vehicles, except for BYD's own battery production and BAIC New Energy's joint venture with South Korea to produce batteries, most companies choose to purchase batteries supplied by power battery manufacturers. Because of the quality and performance of battery products, most domestic companies still prefer to choose foreign battery suppliers. Foreign-funded batteries are "taking over territory" in the domestic market, highlighting the weakness of domestic battery companies. Power batteries are the core components of new energy vehicles. If foreign-funded battery companies monopolize the domestic battery industry, my country's new energy vehicle companies may follow in the footsteps of traditional cars that have "hollowed out core technologies."

In the past two years, domestic power battery manufacturers have been at a disadvantage overall in competing with foreign battery manufacturers. South Korean battery companies are very competitive, which is not only the result of their own efforts, but also the result of South Korea's national strategy. National strategies and policy support are exactly what Chinese battery manufacturers lack most. Financial subsidies and preferential policies for my country's new energy vehicle industry are basically given to vehicle companies. Battery companies can only enjoy the aftermath of the new energy vehicle policy dividends and have not benefited from the explosion of the new energy vehicle market. As a heavy-asset production unit, power battery companies are often strapped for funds and their development speed is slower than that of vehicle companies.

At present, there are a few relatively advanced battery companies in my country such as CATL, Microvast Power, and Waterma. The technical level and overall strength of most battery companies are still relatively low.

According to relevant surveys, in the development of automotive power batteries, Japan leads in technology and South Korea leads in output value. Although my country has a huge market capacity, there is still a big gap between my country's automotive power battery industry and Japan and South Korea in terms of technology and output value. If all independent car companies purchase foreign-funded batteries, my country's new energy vehicle industry will also fall into the dilemma of missing core technologies.

In the future development, the state should give full support to the battery industry and guide the battery industry to carry out mergers and reorganizations, so as to end the "small, fragmented and chaotic" pattern of the domestic battery industry as soon as possible and form several large and competitive battery companies.