Big but not strong, China's new energy vehicle industry faces multiple risks

China's production and sales of new energy vehicles have ranked first in the world for three consecutive years. However, amid the booming development momentum, there are also hidden dangers.

At the 2018 China Automotive Industry Development (TEDA) International Forum held from September 1 to 2, the problems existing in China's new energy vehicle industry received more attention than in previous years. The development achievements of China's new energy vehicle industry are obvious to all. In terms of industry scale, China's new energy vehicle production and sales in 2009 were less than 500 vehicles, and this year it is expected to reach 1.5 million vehicles.

From the perspective of technical level, the driving range of mainstream new energy passenger vehicles has been improved to more than 300 kilometers; from the perspective of international competitiveness, in 2017, four Chinese companies ranked among the top ten in global new energy vehicle sales.

"But we believe that the development of China's new energy vehicle industry is still at a critical stage where it must advance or it will retreat." Song Qiuling, deputy director of the Economic Construction Department of the Ministry of Finance, pointed out the "three major risks" in China's new energy vehicle industry at the forum.

The first major risk is structural overcapacity. Song Qiuling explained that structurally, there is a lack of high-end capacity and overcapacity of low-end capacity in China's new energy vehicles. The industry is showing signs of blind expansion and overheated investment. Some low-level enterprises are disrupting the market by competing with low-quality and low-price products, which has affected the overall level of industrial development.

The second biggest risk is market competition. This competition comes from both traditional fuel vehicles and foreign new energy vehicle brands. "At present, my country's new energy vehicles have no obvious competitive advantage over traditional fuel vehicles, and there is still a big gap with advanced new energy vehicles in the world," said Song Qiuling.

Feng Jinping, Director of the Tariff Department of the Ministry of Finance, introduced at the forum that my country has significantly reduced import tariffs on complete vehicles and auto parts since July 1 this year, covering 78% of complete vehicle tax items and 81% of auto parts tax items. This will undoubtedly bring survival pressure to domestically produced new energy vehicles that are in the acceleration period of starting up.

The third biggest risk is the constraints of resources and the environment. Song Qiuling explained that with the increase in the number of new energy vehicles, the global competition for metal resources is becoming increasingly fierce. However, my country lacks major power battery resources such as lithium and cobalt, and the challenges of stable resource supply and price stability are relatively large. At the same time, problems such as power battery recycling and clean electricity use are becoming increasingly prominent.

"The biggest risk of pure electric vehicles is the safety of the battery, so battery safety must be ensured." Ouyang Minggao believes that there is currently no annual inspection system for electric vehicles in China, and there is a lack of management when the battery seals of pure electric vehicles fail or the warranty period expires, which hides many safety hazards.

When talking about the new challenges that China's new energy vehicles will face as the market competition is fully opened up, Ouyang Minggao believes that with the greater opening up of the domestic automobile market, a large number of foreign new energy vehicle brands will enter the Chinese market, and the competitive landscape of domestic electric vehicles will undergo all-round changes after 2020.

In addition, the lack of technological innovation capabilities in China's new energy vehicle industry was also one of the hot topics of the forum.

"At present, domestic power battery technology has not made a fundamental breakthrough, some key components of new energy vehicles are still controlled by others, the fuel cell vehicle industry chain is lagging behind in all aspects, and the product quality also lags behind the advanced level abroad," Song Qiuling pointed out.

As for fuel cell technology, Ouyang Minggao introduced that the membrane electrode accounts for 70% of the cost of the fuel cell stack, which is equivalent to the chip of the fuel cell. However, China has not yet made a breakthrough in this key technology that is "stuck in the neck".

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.