New energy stocks will be released by the end of July to allow foreign investment

On June 28, 2018, China's Ministry of Commerce issued a document, officially announcing the "Special Management Measures for Foreign Investment Access (Negative List) (2018 Edition)", Article 8 of which clearly stipulates that "Automobile manufacturing: Except for special-purpose vehicles and new energy vehicles, the Chinese shareholding ratio of automobile complete vehicle manufacturing shall not be less than 50%, and the same foreign investor may establish two or less joint ventures in China to produce similar complete vehicle products. (The foreign equity ratio restrictions on commercial vehicle manufacturing will be lifted in 2020. The foreign equity ratio restrictions on passenger vehicle manufacturing and the restrictions on the same foreign investor being able to establish two or less joint ventures in China to produce similar complete vehicle products will be lifted in 2022)." The policy will take effect on July 28, 2018, when the foreign equity ratio and the number of foreign joint ventures in the new energy vehicle field will be officially lifted.

In order to protect the national automobile industry, the "Automotive Industry Policy" issued by my country in 1994 proposed that the Chinese side's shareholding ratio in Sino-foreign joint ventures and cooperative enterprises producing automobiles, motorcycles and engine products should not be less than 50%. It was not until 2013 that the Ministry of Commerce proposed that "in the future, restrictions on foreign investment in general manufacturing fields such as automobiles will be further relaxed." This was the first time in many years that the government pointed out that restrictions on the shareholding ratio of complete vehicles might be relaxed. Since then, various ministries and commissions have pointed out on many occasions that restrictions on the shareholding ratio of complete vehicles will be gradually relaxed in the future.

In the "Foreign Investment Industry Guidance Catalogue" issued in June last year, it has been clearly lifted the restrictions on the number of joint ventures that foreign investors can establish in China to produce pure electric vehicle products, as well as the restrictions on foreign investment in automotive power batteries; in August 2017, the State Council issued the "Notice on Several Measures to Promote Foreign Investment Growth", indicating that it will further reduce restrictions on foreign investment access; in April this year, the National Development and Reform Commission announced that it would formulate a timetable for the opening of automobile equity ratios: after canceling the foreign equity ratios of special-purpose vehicles and new energy vehicles in 2018, the restrictions on foreign equity ratios of commercial vehicles will be canceled in 2020, and the restrictions on foreign equity ratios of passenger vehicles will be canceled in 2022, and the restriction on no more than two joint ventures will be canceled. All of these have been confirmed in the 2018 version of the negative list.

We have learned that although the shareholding ratio has been liberalized, traditional automakers such as Volkswagen will still choose to maintain the existing joint venture structure in the short term. Relatively speaking, the liberalization of shareholding ratios is a "pie in the sky" for foreign-funded emerging new energy automakers that are not bound by traditional production capacity and joint venture partners, and Tesla is the most typical example.

In the past one or two years, there have been constant reports that Tesla is going to build a factory in China. Shanghai, Suzhou, Hefei and other cities have been rumored to be the locations. Later, they were clarified. In May this year, shortly after the release of the proposed timetable for the opening of the automobile equity ratio, Tesla received good news. Tesla (Shanghai) Co., Ltd. obtained a business license, and Musk is one step closer to the production of electric vehicles in China.

Public information shows that Tesla (Shanghai) Co., Ltd.'s main business scope is technology development, technical services, technical consulting, and technology transfer in the fields of electric vehicles and parts, batteries, energy storage equipment, and photovoltaic products, as well as wholesale, commission agency (except auctions) and import and export of the above-mentioned similar products, and provides related supporting services, electric vehicle display and product promotion. Although it does not have the function of "automobile manufacturing", it is paving the way for applying for new energy production qualifications after building a wholly-owned factory.

Tesla has been troubled by production capacity and funding in recent days, and it is in urgent need of building a wholly-owned factory in China, the world's largest new energy vehicle market, to stabilize the "military spirit". However, there are still many variables whether Tesla can successfully enter China. Previously, the People's Daily pointed out in an article that "China's new measures to expand opening up will benefit many trading partners, but it does not apply to those countries that violate WTO rules and launch trade wars against other countries!" In addition, according to the existing policy, Tesla needs to obtain the new pure electric passenger car production qualification issued by the National Development and Reform Commission before it can build a wholly-owned factory in China. The approval of this qualification is currently suspended.

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.