Subsidy Foreign Investment Restrictions On The Relaxation Of New Energy Automotive Industry Is About To Change

- Dec 05, 2017 -

2018 new energy automotive industry will usher in a new turning point. It is reported that subsidies will probably decrease by 20% next year. At present, the national subsidy policy has not been settled yet, and the local subsidy policy has been promulgated one after another. According to "Interim Measures for Promotion and Application of Local Subsidies for New Energy Vehicles in Tianjin", the subsidy standard for 2017-2018 will be lowered by 20% on the basis of 2016. Under the background of the subsidies for the new energy vehicles and the further liberalization of foreign investment in our country, the policy of new energy vehicles gradually shifted from the support of government funds to the cultivation phase of leading enterprises and the survival of the fittest of the industry will be aggravated.

New energy vehicles continue to boom

China regards new-energy vehicles as turning corners in the automotive industry to realize the important opportunities for becoming a powerful automobile country. Good policies and industrial capital to work together to boost new energy vehicles into the fast lane.

According to the data from China Association of Automobile Manufacturers, in October 2017, the production and sales of new energy vehicles in China were 92,000 units and 91,000 units respectively, up 85.9% and 106.7% from the same period of last year. From January to October this year, the production and sales of new energy vehicles totaled 517,000 units and 490,000 units, up 45.7% and 45.4% from the same period of last year. The production and sales volume of the first 10 months of this year approached last year's sales volume.

Behind this, on the one hand, policies frequently release unprecedented positive signals: from the establishment of a double integral policy to promote alternative energy vehicles to traditional fuel trucks in China; to the central bank and the China Banking Regulatory Commission announced that the maximum amount of new energy vehicles for auto loans is 85% To several cities in recent days, the official launch of new energy vehicles and other special plates, issued a series of national policy red envelopes. The local government has also introduced a series of supportive policies to promote the development of the local new energy automotive industry.

On the other hand, stimulated by favorable policies, car and technology giants both at home and abroad have made major strides in beach layout. Vehicle enterprises have attached greater importance to new energy vehicles, introduced more competitive models and accelerated the acceleration of new energy vehicles Mass market. According to incomplete statistics, in the past year, China announced the construction of over 70 new energy vehicle projects with a planned total investment of more than 450 billion yuan and planned production capacity of over 11 million units.


2018 industry turning point is approaching

In 2017, after experiencing the upsurge in trades such as cheating, financing and internet repairing, the new energy vehicles are expected to usher in an industry turning point in 2018.

At the policy level, the environment of the new energy automobile industry will face a sudden change in 2018.

First, the new energy subsidies to the downslope is an inevitable trend. According to the relevant policies previously promulgated by the state, from 2016 to 2020, the national subsidy standard for new energy vehicles will be gradually lowered. Among them, the subsidy standard for 2017-2018 will be lowered by 20% on the basis of 2016, and the subsidy standard for 2019-2020 will be reduced by 40% from the 2016 level. It has been reported that the Ministry of Finance recently convened four ministries and commissions, experts from the Association and major business representatives to conduct a small-scale discussion on the direction and program of adjustment for the subsidies for new energy vehicles in 2018. Subsidy declines in 2019 or be implemented early in 2018.

Second, foreign restrictions gradually relaxed. In June 2017, the Ministry of Commerce released the Catalog for the Guidance of Foreign Investment Industries, clearly setting forth the quantitative restrictions on the establishment of wholly-owned joint ventures for pure electric vehicles in China and the restrictions on the foreign investment of automobile power batteries. On November 9 , The Ministry of Foreign Affairs issued a document and plans to open a pilot dedicated to the share ratio of new energy vehicles in the pilot free trade zone in June next year. Tesla huge investment in China set up factories gradually approaching, foreign giants menacing.

Thirdly, the double integral policy will be formally implemented from April 1, 2018, becoming a new impetus for the continuous promotion of the development of new energy vehicles after the subsidy and the favorable share of new energy vehicles.

Wu Songquan, chief expert of China Automotive Technology and Research Center, said that the subsidy policy of new energy sources is shifting to supporting and boosting the economy and promoting the formation of a market mechanism for survival of the fittest.

At the industrial level, with the influx of technology giants, the advent of the smart car networking in 2018 and the intensive landing phase will make the competition between traditional car companies and Internet companies even more intense. Cui Dongshu, secretary-general of China Passenger Car Market Information Joint Conference, said that new products made by Internet car makers such as Xiaopeng Motor Co., Ltd. and Wei Lai Automotive Co., Ltd. will be intensively announced by the Ministry of Industry and Information Technology, meaning that Internet car makers should start to truly accept market tests.

Survival of the fittest industry chain integration

A series of policy adjustments in 2018 show that the government's thinking on supporting policies for the new energy automobile industry is turning to the market orientation, striving to raise the industry threshold and reversing the current blind development and low-level construction. In the long run, the market structure is expected to be concentrated in the leading enterprises, and the survival of the fittest in the field of new energy vehicles will be exacerbated.

For car prices, the market is determined by the technology and services. At the same time with foreign giants competing in the field, R & D capabilities of Chinese enterprises need to be enhanced, power battery safety technology promotion without delay. In addition, with the development of new energy and intelligent vehicles, BAT has set off a new upsurge of joint ventures with SAIC and Beiqi in the joint venture between auto companies and auto companies. In the future, BAT will seize opportunities by strengthening ecological layout, integrating industrial chains and accelerating production capacity.

Source: China Battery Network

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