On October 9, 2020, the executive meeting of the State Council adopted the "Development Plan of New Energy vehicle Industry". First, it is necessary to tackle key technologies and encourage the development and innovation of vehicle operating systems and power batteries. We will support the deep integration of new energy vehicles with energy, transportation, information and communications industries, promote the coordinated development of electrification, networking and intelligent technology, and promote standards docking and data sharing.

Second, it is necessary to strengthen the construction of infrastructure such as charging and hydrogenation, and speed up the formation of highways dominated by fast charging and public charging networks in urban and rural areas. Give financial support to the construction of charging piles as public facilities. Encourage the application of power exchange mode.

Third, we should encourage and strengthen international cooperation in the field of new energy vehicles.

Fourth, it is necessary to increase policy support for the use of new energy vehicles in public services. Starting from 2021, the National Ecological Civilization Experimental Zone and key areas for the prevention and control of air pollution will add or update public domain vehicles such as public transportation, rental, logistics and distribution, and the proportion of new energy vehicles will not be less than 80%.

In 2019, the global new energy vehicle industry staged a song of ice and fire, and the industry differentiation intensified.

On the one hand, with the layoffs of giants such as GM and Ford, the merger of Fiat Chrysler and Peugeot Citroen, and the traditional car companies huddling together to keep warm, the traditional automobile industry is facing a "Nokia moment". On the other hand, the new power represents Tesla, Inc. 's accelerated internationalization, with annual sales of nearly 400000, an increase of 50 per cent over the same period last year.

On the one hand, the subsidies for new energy vehicles in China have declined, and sales have shown negative growth for the first time, while on the other hand, Germany has increased subsidies for new energy vehicles, and sales of new energy vehicles in Europe have greatly increased.

Since Karl Benz invented the first modern car in 1885, the automobile industry has never become the intersection of so many technological changes, involving energy, transportation, communications, computer and many other industries. The new four modernizations of the automobile-the wave of electrification, intelligence, networking and sharing has begun, and the automobile industry is facing an unprecedented change and reshuffle in the past century.

One of the changes

Tesla, Inc. and other new forces rise, Internet, semiconductors and other technology giants enter across the border, the automobile industry competition pattern is reshaped, the core value chain is reconstructed, and some OEM may become contract factories in the future.

1) reshape the pattern:The new car-building forces represented by Tesla, Inc. are constantly grabbing the market share of traditional car companies by making use of their first-mover advantages and Internet genes. From January to November 2019, sales of the Tesla, Inc. Model 3 in North America reached 128000, exceeding the sum of the same class of BMW 2Accord 4 / 5 Series (104000), Mercedes-Benz C/CLA/CLS/ E-Series (95000) and Audi A3 / A4/A5/A6 (70, 000).

On the other hand, traditional car companies such as GM and Ford are laying off staff one after another, and FCA (Fiat Chrysler) and PSA (Peugeot Citroen) merged to form the fourth largest car company in the world.

2) value chain reconstruction:In the future, the core value of the automobile industry will no longer be the engine, body, chassis, but batteries, chips, on-board systems, data. Cake making may be a traditional car company, while cake eaters may be new forces.

Volkswagen, the world's largest carmaker, has announced that it will become a software-driven company and has set up a "Digital Car&Service" division to vigorously promote the digital transformation.

Toyota announced that Toyota will transform from a car company to a mobile travel company, and their competitors are no longer Mercedes-Benz, BMW and Volkswagen, but Apple Inc, Alphabet Inc-CL C and others.

Giants such as Alphabet Inc-CL C, Qualcomm Inc, NVIDIA Corp, Huawei, BABA and Baidu, Inc. have embedded intelligent driving segments through cooperation, authorization or supplier identity, which may occupy an important value point in the industry in the future. Some car companies that are unable to master the core technology can only be gradually marginalized and even become contract manufacturers.

The second change of situation

Nowadays, the governments of Europe, Japan and South Korea have accelerated the electrification transformation one after another, verifying the foresight of China's strategy of developing new energy vehicles ten years ago. After ten years of planning and cultivation, China's new energy automobile industry has a certain first-mover advantage and scale advantage. Chinese Autobots have never been so close to the dream of an automobile power.

However, Tesla, Inc. set up a wholly-owned factory in Shanghai in 2019 and delivered it on December 30th. The price of Model 3 is less than 300000 after subsidy. In the face of this "catfish", can China's own car brands keep the first-mover advantage?

1) Europe, the United States, Japan and South Korea promote the transformation of electrification through top-level design and car companies from the bottom up: in April 2019, the European Union released the most stringent carbon emission standard in history. Norway, the Netherlands, the United Kingdom, France and Portugal set the ban on the sale of fuel vehicles at 2025, 2030, 2040, 2040 and 2040 respectively. The development of new energy vehicles is the only way out.

Germany has enacted legislation to confirm that subsidies for domestic electric vehicles have risen instead of falling. Subsidies for pure electric vehicles selling for less than 40, 000 euros have been increased from 4000 euros to 6000 euros. Car companies have increased their investment. Volkswagen will increase the number of electric vehicles it originally planned to produce from 15 million to 22 million by 2030.

2) China's new energy vehicle industry urgently needs to make up for its shortcomings and turn its first-mover and scale advantages into technology and brand advantages: 563000 new energy passenger vehicles were sold in China in the first half of 2019, with a global market share of 56.9%, much higher than that of the European Union (20%). Industrial chains such as three power systems and charging infrastructure have initially taken shape.

From January to November, independent brands accounted for 4 of the top 10 new energy passenger car companies in the world (BYD, BAIC, SAIC, Geely). However, most of China's new energy vehicles rely on domestic sales, and there are no Chinese brands of best-selling electric models in the United States, the European Union and Japan from January to September 2019.

Some core components are highly dependent on imports, such as electronic control core components IGBT devices and image processing chips. Germany, Japan and the United States accounted for 34.3%, 7.2% and 24.9% of the global IGBT market in 2018, respectively; image processing chips were basically monopolized by NVIDIA Corp and Mobileye (acquired by Intel Corp).

The third change of situation

The attributes of automobile products are more diverse, and the automobile will become a software-defined intelligent mobile terminal.

1) hardware reform: on the one hand, batteries, motors and electronic controls will replace engines, and automobile powertrain will face the biggest change in a century; on the other hand, Intelligent Network will enhance the demand for vehicle perception, interaction and decision-making. sensors, central control screens and chips will become the core components of the automobile.

2) Software change: automotive electronic and electrical architecture will evolve from distributed to centralized architecture similar to smartphone (underlying operating system, chip SOC). The decoupling of software and hardware not only realizes the standardization of hardware, but also realizes the repeated development and utilization of software, and greatly reduces the internal redundancy. In the future, there will be a dispute between iOS and Android in the automobile industry.

3) Service and ecological change: intelligent Networked vehicles can continuously update their applications through OTA air upgrades during their life cycle, and interface interaction will give cars more application scenarios-drivers will have more free time in the case of self-driving, while car networking technology enables cars to connect with offices, homes and public facilities at any time to achieve remote control. Cars will be the entrance to a variety of services and applications.

In the face of the great changes in the automobile industry in the past hundred years, the road of China's automobile power is facing unprecedented opportunities and challenges. "changing lanes and overtaking" needs the full cooperation of policy and the whole industry chain.

To this end, we suggest that:

1) further guide the transformation of electrification:We will first ban the sale of pilot fuel vehicles in public transport, logistics, rental and other official fields, encourage some key air pollution control areas and cities with high popularity of new energy vehicles to ban the sale of fuel vehicles, and clarify the requirements for the proportion of new energy vehicles in online car-hailing.

2) encourage and support the research and development of core technologies:Increase tax relief for enterprises with high R & D investment, set up a national new energy automobile industry fund to support the weak links of the industrial chain; coordinate the efforts of the government, enterprises, universities and other parties to tackle key common technologies such as battery materials and core chips.

3) strengthen the construction of battery safety system:The use of big data platform to establish early warning mechanism, strengthen prior supervision; establish power battery life cycle safety testing, strengthen in-process supervision; establish accountability system, strengthen ex post supervision. According to the report on the Safety Supervision results of big data, the national supervision platform for new energy vehicles, of the 79 safety accidents of new energy vehicles discovered from May to August in 2019, 47 were connected to the supervision platform, and 28 accidents occurred within 10 days before the occurrence. Has been warned by the regulatory platform.

4) to develop and support the new energy used car market:Car owners generally change cars for 3-5 years due to changes in social relations, economic conditions and family population. The three-year residual value rate of traditional fuel vehicles is about 70%, and that of new energy vehicles is about 30%. The depreciation is too fast, and the cost of trial and error is too high. Many consumers dare not buy new energy vehicles and have a strong wait-and-see mood.

5) speed up the construction of private charging piles and encourage the promotion of community wisdom charging.：The difficulty of charging is an important factor that limits the development of new energy vehicles. As of November 2019, China's public charging pile 496000, private charging pile 678000, compared with the 2020 target completion rate of 99.2% and 15.8% respectively, the construction of private charging pile is far from the expected. The great impact on the power grid load of the residential area is an important factor for the slow construction of private charging piles; the promotion of community intelligent charging can effectively achieve peak cutting and valley filling and reduce the power grid load.

Risk Tips:The cost of industrial chain falls less than expected, the caliber of data statistics is different, and so on.