① Why is the “trade-in” of this round of cars drawing the attention of the market? ② What are the benefits of introducing autonomous driving?
Financial Services Association, April 29 (Editor: Wu Ka-wing) Hong Kong auto stocks strengthened again today, benefiting from the favorable news of “trade-in” and autonomous driving. Among them, Zero Sports Auto (09863.HK) rose nearly 8%. As of press release, Zero Sports, Xiaopeng Motors, Weolai-SW (09866.HK), and Geely (00175.HK) have risen 7.62%, 4.13%, 4.02%, and 3.19% respectively.
Note: The performance of auto stocks
In terms of news, on the evening of April 26, seven departments including the Ministry of Commerce and the Ministry of Finance jointly issued the “Vehicle Trade-In Subsidy Implementation Rules”. Until December 31 of this year, consumers who scrapped fuel passenger cars with fuel standards of 3 and below, new energy passenger cars registered before April 30, 2018, and purchased passenger cars with fuel emissions of 2.0 liters or less or new energy passenger vehicles will be given financial subsidies of 70,000 yuan and 10,000 yuan, respectively.
Note: “Vehicle Trade-In Subsidies Implementation Rules”
The “Rules” clarify the subsidy application process. Individual consumers who wish to apply for a car trade-in subsidy should fill in the application materials by logging on to the National Automobile Distribution Information Management System website or the “Car Trade-in” mini program before January 10, 2025. The relevant materials should be obtained between the date the “Rules” are issued and December 31, 2024.
Why is the “trade-in” of this round of cars drawing the attention of the market?
CITIC Construction Investment pointed out in today's research report that this round of “trade-in” cars is expected to boost sales.
First, this round of policy subsidies is strong, which is expected to drive an increase of 2 million. There is no cap on the total amount of subsidies in this round. Since “trade-in” was proposed in early March, terminal wait-and-see orders have clearly accumulated, and demand is expected to be released intensively starting in May. CITIC Construction Investment predicts that this round of subsidies is expected to drive an increase of 2 million vehicles, support an increase in domestic demand throughout the year, compounded by the continued export boom, and the industry's growth rate is expected to rise to double digits.
Second, targeted subsidies accurately drive sales. The scope of the subsidy is “national three or less” fuel vehicles and trams of 6 years or more. According to statistics, the number of fuel vehicles that meet the standards is nearly 16 million (over 7 million models over 15 years old), and the number of trams over 6 years old is estimated to be 1.17 million (10% eliminated on an annual basis). Overage model users are more willing to replace them, and targeted subsidies are expected to accurately drive sales.
Finally, the combined efforts of state land subsidies are expected to keep up, and it is expected that subsidies for car companies will keep up, which is expected to form a triple resonance. According to CITIC Construction Investment statistics, many regions are already actively providing subsidies, plus national-level subsidies that exceed expectations “add a spark.”
They also pointed out that from the perspective of car companies, there is a demand for price reduction in exchange for volume in the context of “internal volume,” and it is appropriate to follow the trend. In the future, it is expected that land supplements and national subsidies will be superimposed, plus a number of car companies' subsidies. If companies subsidize 3,000 yuan, the actual bicycle subsidy strength may reach 13,000 or 10,000 yuan and generally exceed 10,000 yuan, forming a triple resonance to boost sales.
Autonomous driving once again benefits from policies
In addition to the benefits of trade-in, autonomous driving yesterday ushered in favorable policies. In terms of data storage, the official website of the China Association of Automobile Manufacturers announced the “inspection status of 4 safety requirements for automobile data processing” for a batch of newly launched models on April 28.
Note: Notice on the inspection status of 4 safety requirements for automobile data processing
Among them, 76 models from 6 companies, including BYD, Ideal, Lotus, Hezhong New Energy, Tesla, and NIO, met the 4 compliance requirements for automobile data security. Tesla had the highest number of compliance reports, reaching 20 models, followed by BYD with 18 models.
Tesla said in this regard that Tesla has passed the country's authoritative standards and requirements for vehicle data security, which is conducive to completely lifting the ban on smart cars such as Tesla (such as government units, airports, highways, etc.).
Tesla also published an article on the same day stating that it will continue to cultivate deeply in China, develop with the industry in the fields of artificial intelligence, electric vehicles, energy storage, etc., and accelerate the implementation of clean energy and autonomous driving technology.
In fact, autonomous driving technology has become an important development direction for the automotive industry, and is regarded by many car companies as one of the core competencies of their products. Many countries and regions have begun enacting relevant regulations to support the development of this technology. This policy environment provides favorable conditions for car companies to develop autonomous driving.