market

Original title: Farewell, new energy subsidies

The national financial subsidy for new energy vehicles, which has lasted for 13 years, will officially withdraw from the stage of history in one month. At this time point with a little farewell meaning, the new energy vehicle market was once again unable to hold back and became restless. Among the many new energy car companies, some have heard about the price increase, some have promised to keep the price, and some have directly launched promotional activities. “The countdown to the cancellation of the national subsidy is the last 5 days!” The news released by Cyrus a week ago showed that users ordered to buy some AITO cars before November 20, and the manufacturer will guarantee that they can enjoy the national subsidy. This move by Celes directly refers to product promotion around the withdrawal of subsidies.

Coincidentally. On November 22, Leap Motors issued car purchase subsidy coupons of varying amounts for its three models, C11, T03, and C01 (except the rear-drive standard battery life version). The threshold for receiving subsidy coupons is very low, but they can only be used for 12 The deposit must be paid before December 4, and the vehicle must be registered before December 31.

Tesla has also recently introduced a policy that stipulates that car owners who purchase an existing car and an auto insurance combination from a cooperative insurance agency before November 30 and complete the delivery of the car on schedule can enjoy an insurance subsidy of 8,000 yuan; You can get an insurance subsidy of 4,000 yuan.

According to the notice issued by the Ministry of Industry and Information Technology and other four departments in December 2021, the subsidy policy for the purchase of new energy vehicles will be terminated on December 31, 2022. After that, the state will no longer provide subsidies for vehicles that are registered (current subsidy amount: plug-in hybrid) 4,800 yuan/set for a car, 12,600 yuan/set for a pure electric car).

The presence or absence of subsidies means that consumers can reduce the cost of purchasing a new energy vehicle by thousands or tens of thousands of yuan. To determine whether a new energy vehicle is within the subsidy time limit, it is based on the vehicle’s registration date rather than the sales date. This is another reason why current new energy vehicle companies are trying their best to attract customers to place orders as soon as possible.

In fact, the above scenario has repeatedly appeared in the process of every new energy subsidy reduction in the past, and the situation in the market this time is similar to the past. However, since the withdrawal of new energy subsidies will be permanent this time, the meaning it represents is completely different from the past—the new energy vehicle industry will completely get rid of policy dependence and enter a purely market-driven “post-subsidy era”.

Car prices are weakening

At present, most new energy car companies have adopted an order-based production model, where users make an order first, and manufacturers schedule production according to the order. It generally takes at least several weeks from the user’s order, production scheduling, new car delivery, and registration. If the consumer makes an order late, and the vehicle is too late to be licensed before the end of December this year, it will not be able to enjoy the state subsidy. Therefore, in order to protect consumers’ opportunities to enjoy state subsidies, many car companies have introduced “price protection” measures.

On November 23, BYD announced that due to factors such as the upcoming end of the new energy subsidy policy, it will adjust the official guide prices of new energy models related to Dynasty, Ocean and Denza, with an increase ranging from 2,000 yuan to 6,000 yuan, but it is clearly stipulated that “Customers who pay a deposit to sign a contract before January 1, 2023 will not be affected by this price adjustment.”

Jikr Automobile, a subsidiary of Geely, announced that if orders for WE models placed before December 31 this year (inclusive) are not delivered within 2022 due to Jikr, Jikr will follow the 2022 new energy state subsidy policy to users Provide differential subsidies.

In the Beijing area, Xiaopeng Motors’ policy is that if users who place an order before December 31 this year cannot get a license plate within the state subsidy time limit, Xiaopeng Motors will give the user official points equal to the value of the state subsidy, and the points can be used to exchange All kinds of official products.

In the face of subsidy adjustments, it is not new for car companies to introduce price protection measures. Since 2009, the central government has subsidized the promotion and application of new energy vehicles. After 2016, except for fuel cell vehicles, the subsidy standards for other new energy vehicles will be reduced, that is, the subsidy amount will decrease year by year, and the vehicle standards that enjoy the subsidy will increase year by year. Every time the subsidy declines, it triggers the price protection action of car companies.

However, in the past few years, the overall strength of car companies’ price protection policies around subsidy adjustments has shown a trend of “shrinking”.

In 2019, the overall reduction of new energy vehicle subsidies exceeded 40%. At that time, car companies “paid out of their own pockets” to extend the time limit of the old subsidy standards. After the subsidy withdrawal transition period officially ended on June 26, 2019, BYD, GAC Aian, Chery New Energy, Geely, Weimar and other car companies remained on hold, announcing that users can continue to enjoy the 2018 subsidy standards within a certain period of time. Among them, Chery New Energy launched the slogan “All models continue to enjoy the 2018 subsidy policy”.

On January 1 this year, the new energy subsidy was reduced again by 30%. Enjoy the same subsidy standards as in 2021, and the subsidy difference will be borne by Xiaopeng Motors”, but more car companies such as Tesla, GAC Aian, FAW-Volkswagen, and Nezha have chosen to increase prices.

From the perspective of car companies, price protection is to protect market sales. However, in recent years, as the impact of subsidy reduction on the new energy vehicle market has gradually weakened, car companies have also become more and more flat about price guarantees.

Statistics from the Passenger Passenger Association show that in January 2016, in the first month after the subsidy was withdrawn for the first time, sales of new energy passenger vehicles reached 14,000, a 63% drop from the previous month. By January 2021 and January 2022, it is also the first month after the subsidy was withdrawn that year, but the sales of new energy passenger vehicles in these two months fell by 20.5% and 18.5% month-on-month. The impact of the decline in subsidies for new energy vehicles on the market has significantly weakened.

Reliance on subsidies is fading away

After many years of subsidy support, new energy car companies and even the entire new energy car industry have been speeding up the withdrawal of subsidy dependence in recent years. Many industry data show that compared with many years ago, the current new energy vehicle market is much less sensitive to subsidies.

First of all, since the subsidy was withdrawn, the amount of subsidy per vehicle in the new energy vehicle market has been decreasing year by year. On October 8 this year, the Ministry of Industry and Information Technology released the “2020 New Energy Vehicle Promotion and Application Subsidy Fund Clearing and Review Vehicle Information Form”, which shows that the average new energy vehicle approved in 2020 can receive a subsidy of 23,000 yuan per vehicle, while 2017- In 2019, the average subsidy for each vehicle was 67,300 yuan, 50,400 yuan, and 37,400 yuan, decreasing year by year.

Second, the proportion of subsidies in vehicle sales has been decreasing year by year. According to statistics from the Passenger Federation, with the decline in subsidies, the proportion of subsidies in the sales price of best-selling pure electric models in that year has dropped from an average of about 35% in 2017 to an average of about 10% in 2021. From January to October this year, among the top ten models of pure electric passenger car sales, Hongguang MINI EV, Tesla Model Y, and Chery QQ Ice Cream are not eligible for the subsidy policy, and the subsidies for other models account for only 4% of the selling price. %-11%.

Furthermore, according to the data released by the Ministry of Industry and Information Technology, the proportion of new energy vehicles receiving state subsidies has been decreasing year by year, from 78% in 2017 to 63% in 2020, and only 47% in 2021.

Judging from the situation of leading new energy car companies, the proportion of new energy subsidies in the revenue of various companies is getting lower and lower. Taking BYD as an example, its revenue in 2017 was 105.9 billion yuan, and the subsidy to BYD in 2017 was 4.7 billion yuan, accounting for about 5% of revenue, but this proportion dropped to less than 4% in 2019 , and will further drop to less than 2% in 2020.

In addition, since the beginning of this year, due to factors such as the price increase of upstream raw materials and the shortage of batteries and chips, the entire new energy vehicle industry chain has been in a tight supply situation, which has triggered several rounds of price increases in the new energy vehicle market. This dilutes the cost benefits brought about by the subsidy.

In the past many years, an important purpose of the new energy vehicle subsidy policy to set qualification thresholds, transition periods, and slope-retirement timetables is to maintain the stable development of the market and avoid sharp rises and falls in model prices. But now, what is enough to cause fluctuations in the terminal price of the new energy vehicle market is no longer the subsidies for new energy vehicles, but the rising supply cost of the industrial chain.

The steep rise in the cost of the industry chain has placed enormous performance pressure on many car companies. Financial report data show that in the second quarter of this year, Xiaopeng Motors had a net loss of 2.7 billion yuan, compared with a loss of 1.195 billion yuan in the same period last year, and its gross profit margin also declined year-on-year. In the third quarter of this year, NIO’s adjusted net loss was approximately 3.46 billion yuan, an increase of 58.3% from the previous quarter, a record high.

Statistics from the China Association of Automobile Manufacturers show that from January to October this year, the production and sales of new energy vehicles were 5.485 million and 5.280 million respectively, an average increase of 1.1 times year-on-year. At the same time, the market penetration rate has risen rapidly. Last year, the new energy vehicle market penetration rate reached 13.4%, an increase of 8 percentage points over the previous year. In the first 10 months of this year, it climbed again to 24%.

It is generally believed in the industry that the sales of new energy vehicles have soared in the past two years, and the driving factors behind it are mainly the internal driving force of the market, rather than the guidance of financial subsidies. The current critical issue in the auto market is that the demand for new energy vehicles is high but auto companies cannot deliver orders in time.

In the middle of this year, Changan Automobile issued an announcement saying that the order of the pure electric car Benben E-Star model was suspended. The reason was that the delivery cycle of this model was longer due to the impact of the shortage of upstream raw materials and the limited production capacity of complete vehicles and parts. It has been half a year now, and Benben E-Star is still in the state of “suspended subscription”. In a conference call at the end of August this year, BYD Chairman Wang Chuanfu revealed that BYD has 700,000 orders in hand, but the delivery cycle for new car orders has been as long as 4-5 months.

In this context, even if many car companies have launched various promotional activities around the reduction of subsidies, it may still be difficult to complete the order delivery in the short term. CITIC Securities recently issued a report predicting that it is expected that the “impulse” of auto companies brought about by the decline in subsidies in the fourth quarter of this year will have an overdraft effect on sales in the first quarter of 2023 that will be further weaker than in previous years. (Reporter Pu Zhenyu）