Who benefits from the double points game?

With the implementation of the "Double Points Method" and the launch of the trading platform, China's new energy vehicles have entered the post-subsidy era. In the game of the double points policy, major automakers can be said to be some happy while others sad.

As early as September 2017, the Ministry of Industry and Information Technology clearly stated that passenger car companies will be evaluated according to the "double points" system of points for average fuel consumption of passenger cars and points for the proportion of new energy vehicles. If the points do not meet the standards and the negative points are not compensated, the car companies will face penalties such as suspension of application for car catalogs, suspension of production or import of some traditional car models. According to the policy, the new energy points ratio requirements for 2018, 2019 and 2020 are 8%, 10% and 12% respectively. In short, the new energy vehicle points are the difference between the actual value of the company's new energy vehicle points in that year and the standard value.

After the "Double Points Method" was officially implemented on April 1 this year, new energy vehicles have once again ushered in explosive growth, and domestic brands have become the big winners in new energy vehicle points. According to the statistics of the China Passenger Car Association, from January to May 2018, 270,000 new energy vehicles were produced nationwide, a year-on-year increase of 129% over 2017; 820,000 new energy points were generated, a year-on-year increase of 64%; the average score per passenger car was 3.1 points, an increase of 7% from 2.9 points in 2017; the score of domestic independent brands in the first five months reached 21.5%, while that of joint venture brands was only 0.7%. The share of new energy vehicle points in the first five months of 2018 reached 8.9%, exceeding the 6.8% for the whole year of 2017, and exceeding the 8% compliance requirement. According to the provisions of the "Double Points Method", before June 30, the Ministry of Industry and Information Technology will release a double points accounting report. If a passenger car company has negative average fuel consumption points and negative new energy vehicle points, it shall submit a negative average fuel consumption points and negative new energy vehicle points compensation report to the Ministry of Industry and Information Technology within 60 days after the release of the passenger car company's average fuel consumption and new energy vehicle points accounting report, and complete the negative points compensation to zero within 90 days after the release of the accounting report. That is, the first centralized transaction of points will be ushered in the third quarter of this year. The Equipment Industry Department of the Ministry of Industry and Information Technology issued a notice on July 2 that the passenger car company's average fuel consumption and new energy vehicle points management platform has been launched. From now on, passenger car companies can transfer/accept fuel consumption points and trade new energy vehicle points on this platform.

In this game of double points, BYD and BAIC are the happiest. With the start of the points trading, BYD and BAIC can earn 1 billion yuan with sufficient points in their hands. Looking at the car companies ranked lower, they are not so optimistic. Changan Automobile and Great Wall Motor may have to spend 1 billion yuan for this. Those companies with small sales volume, weak profitability, no big background and joint venture partners may face severe survival problems in the future. However, as one of the important drafters of the double points policy, Zhao Dongchang, deputy chief engineer of the Data Resources Center of the China Automotive Technology Center, analyzed that from the perspective of the entire industry structure, both CAFE (average fuel consumption) positive points and new energy positive points are relatively abundant. At present, there are only a few companies in the industry with negative CAFE points, and nearly 2 million points are concentrated in the top ten companies. The points trading is very small, just a matter between 20 companies. In addition, if the transaction price of points can reach 1,000 yuan/point, it will meet the previous expectations. However, the feedback from the industry may be more pessimistic than we expected. The total amount of positive points in the next two years will be relatively large. After the formal launch of point trading in July, the activity of the transaction can be judged. The volume of transactions and the companies involved in the transactions may not be as optimistic as we expected before. The pressure may be released in September. In the post-subsidy era, facing the arrival of double points, major car companies will certainly not sit idly by. The re-joint venture between brands is also the result of bold attempts by major car companies to cater to the market after constant game. Although the hand-in-hand marriage is "willing", it is "unavoidable". For example, the marriage between JAC and Volkswagen. JAC Motors' sales and profits have declined significantly in recent years, but its new energy business is unique with its first-mover advantage. Data shows that in 2017, JAC Motors produced and sold 497,979 and 510,892 new cars, down 24.13% and 20.58% year-on-year respectively, and the net profit attributable to shareholders of listed companies also fell 62.83% year-on-year; however, the cumulative sales of new energy vehicles increased by 3.8% year-on-year to 28,263 units, becoming the only bright spot. From January to May this year, JAC sold a total of 223,700 vehicles, down 6.68% year-on-year, while the cumulative sales of pure electric passenger vehicles increased by 184% to 18,000 units compared with the same period last year. Volkswagen sold 3.98 million vehicles in China in 2016 and is expected to exceed 4 million vehicles in 2018. Based on the 8% new energy credit ratio, it needs at least 320,000 credits. Volkswagen's pure electric models such as Electric Up are all imported models and cannot enjoy financial subsidies. They are priced high and naturally have few sales. Under such circumstances, it is reasonable for Volkswagen of Germany to marry JAC Motors, which has advantages in new energy vehicles. In mid-June 2017, Volkswagen of Germany and JAC Motors signed an investment agreement. The newly established joint venture between the two parties will officially put into production the first electric car in 2018 and achieve production and sales of 200,000 vehicles in 2020. This almost created a precedent for the same foreign-funded automaker to establish three joint ventures in China. However, considering the cycle from factory construction to production, the new joint venture between Volkswagen and JAC is still not enough to meet the Volkswagen Group's 2018 points task. However, in the long run, after the marriage, the two sides will be able to survive and develop in a fierce market competition environment by holding together for warmth and achieving mutual benefit and win-win results. So far, there have been 5 joint ventures established because of the "double points system". In addition to JAC Volkswagen, there are also Great Wall BMW, Zotye Ford, BAIC Daimler, and Dongfeng Renault-Nissan. The policy opportunity has made it possible for brands that seemed impossible to cooperate.

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.