In May, the penetration rate of wholesale sales of new energy vehicles reached a new high of 44.2%. The European Union has imposed temporary tariffs on domestically produced pure electric vehicles to promote the return of the automotive manufacturing industry to Europe. The profitability of overseas business is strong, and local car companies cannot abandon the European market.
Futu Securities released a research report stating that in May, the penetration rate of wholesale sales of new energy vehicles reached a new high of 44.2%, with a month-on-month increase of 10.7% and a year-on-year increase of 4.1%. BYD and others lead the development of plug-in hybrid vehicles, while Changan and Great Wall continue to promote electrification and transformation. The car market is still weak in June, with retail sales expected to decline year-on-year but recover slightly month-on-month. The wave of price cuts in the automotive market has stabilized, and regions have accelerated the implementation of policies for trading in old cars for new ones. Promotions for new energy vehicles in rural areas have gradually started, and the future is worth looking forward to. The European Union has imposed temporary tariffs on domestically produced pure electric vehicles to promote the return of the automotive manufacturing industry to Europe. The profitability of overseas business is strong, and local car companies cannot abandon the European market. In the short term, measures such as raising terminal prices, reducing shipping costs, and launching plug-in hybrid models can be taken to cope with the situation. In the long term, localization of supply in Europe is the general trend.
The major viewpoints of Open source Securities are as follows:
In June, the automotive market is still weak, and the effect of policies needs to be demonstrated. Focus on the subsequent performance of leading electric and intelligent car companies.
The car market is still weak in June, with retail sales expected to decline year-on-year but recover slightly month-on-month. The wave of price cuts in the automotive market has stabilized, and regions have accelerated the implementation of policies for trading in old cars for new ones. Promotions for new energy vehicles in rural areas have gradually started, and the future is worth looking forward to. The European Union has imposed temporary tariffs on domestically produced pure electric vehicles to promote the return of the automotive manufacturing industry to Europe. The profitability of overseas business is strong, and local car companies cannot abandon the European market. In the short term, measures such as raising terminal prices, reducing shipping costs, and launching plug-in hybrid models can be taken to cope with the situation. In the long term, localization of supply in Europe is the general trend.
In May, passenger vehicle wholesale sales volume increased slightly month-on-month, and the penetration rate of new energy vehicles reached a new high of 44.2%.
Under the influence of factors such as the stabilization of automotive price cuts, the implementation of policies for trading in old cars for new ones, and the launch of high-heat exhibitions and new models, the retail volume in May recovered slightly month-on-month but declined slightly year-on-year, with significant drag from fuel vehicles.
In terms of new energy, the penetration rate of wholesale sales of new energy vehicles reached a new high of 44.2% in May, with a month-on-month increase of 10.7% and a year-on-year increase of 4.1%. BYD and others lead the development of plug-in hybrid vehicles, while Changan and Great Wall continue to promote electrification and transformation.
Regarding exports, in May, the export volume of passenger cars increased by 22.1% year-on-year and continued to be an important driving force for demand, with a slight month-on-month decrease due to the sharp increase in shipping costs. BYD, Changan, Great Wall, and Geely saw high growth in export volume.
In terms of intelligentization, since May, the Ministry of Industry and Information Technology has continued to promote the smart connected vehicle pilot program. Nine car companies including Changan and BYD were the first to pass the selection for L3/L4 intelligent connected vehicle access and road testing in China. Car companies are accelerating the layout of their intelligent driving business. Tesla stated that the performance of HW5 is ten times that of HW4, and the safety of Autopilot far exceeds the average level of American car companies. Huawei's ADS 3.0 is expected to be first launched on the XPeng P7, and XPeng’s large-scale end-to-end AI model will double its driving ability. NIO has opened up ten cities for its NOA, and Xiaomi has launched its city NOA. In the future, pay attention to the possibility of landing for Tesla's Robotaxi and Huawei's cooperation with Changan, as well as the release of new models.
New car preview: BYD SongL DM-i will be equipped with DM5.0 technology, effectively reducing fuel consumption and improving endurance, and is expected to replicate the performance of the SongPlus DM-i. Horus 07 sounded the horn of switching existing models to DM5.0. Deep Blue G318 has both off-road ability and spaciousness, comfort, and cost-effectiveness. It is highly competitive in the light off-road market. The Avita 07, 11/12 extended-range models will be launched soon, opening up sales channels for boosting sales, and Changan's new energy brand is expected to go further.
BYD SongL DM-i will be equipped with DM5.0 technology, effectively reducing fuel consumption and improving endurance, and is expected to replicate the performance of the SongPlus DM-i. Horus 07 sounded the horn of switching existing models to DM5.0. Deep Blue G318 has both off-road ability and spaciousness, comfort, and cost-effectiveness. It is highly competitive in the light off-road market. The Avita 07, 11/12 extended-range models will be launched soon, opening up sales channels for boosting sales, and Changan's new energy brand is expected to go further.
Investment suggestion: pay attention to the technology iteration of BYD and the subsequent performance of Huawei-related Wenjie models / Changan's acceleration in electrification and intelligentization.
BYD DM5.0 and e-platform 4.0 technologies bring forward advantages, and new models will gradually be equipped. The leading position is stable, and overseas business is growing year-on-year, with increased investment in the intelligent field. At the same time, Weltmeister M9 is accelerating its sales volume, with a high unit price per vehicle, and Weltmeister M7 is expected to continue its impressive performance after the facelift. Sokon Q2 performance is expected to exceed expectations, and the release of Enjoy S9 is imminent. Huawei-related joint ventures, BAIC BluePark New Energy Technology Co., Ltd. and Anhui Jianghuai Automobile Group Corp., Ltd. are also worth noting. In addition, new energy brands such as Changan Shenlan and Avatar are actively promoting, and the new company in cooperation with Huawei is expected to land.
Recommended symbols: BYD (002594.SZ), Changan Automobile (000625.SZ), Great Wall Motor (601633.SH); Benefiting symbols: Chongqing Sokon Industry Group Stock (601127.SH), BAIC BluePark New Energy Technology Co., Ltd. (600733.SH), Anhui Jianghuai Automobile Group Corp., Ltd. (600418.SH), Leapmotor (09863), XPeng Inc.-W (09863), NIO Inc.-SW (09866), and Li Auto Inc.-W (02015).
Risk warning: lower than expected demand in the passenger vehicle industry, slower than expected transition to electric and intelligent vehicles, slower than expected overseas development, lower than expected policy support, intensified industry competition, and significant fluctuations in raw material prices.