Let's take a look at what happened to the new energy vehicle companies that were named by the Ministry of Industry and Information Technology as fraudulent subsidies

July 1st is a landmark day for the Chinese people, and it is particularly important for the new energy vehicle industry. On July 1st, 2017, the "Regulations on the Access Management of New Energy Vehicle Manufacturers and Products" was officially implemented. The purpose of the Ministry of Industry and Information Technology to formulate this regulation is to effectively improve the quality and safety level of new energy vehicle products, and to a large extent, it is also an effective response to the industry's "subsidy fraud" behavior.

So looking back, how did those companies that obtained state subsidies through improper means recover after their crimes were exposed and they were "named" by the Ministry of Industry and Information Technology?

How are the rectifications made by the penalized companies?

On September 8, 2016, the Ministry of Finance reported and punished five typical subsidy fraud companies: Suzhou GMC Bus Manufacturing Co., Ltd., King Long United Automotive Industry (Suzhou) Co., Ltd., Shenzhen Wuzhoulong Automobile Co., Ltd., Chery Wanda Guizhou Bus Co., Ltd. and Henan Shaolin Bus Co., Ltd. GMC became the only company whose vehicle production qualification was revoked.

Chery Wanda, Suzhou Kinglong, Shenzhen Wuzhoulong and Shaolin Bus were fined by the Ministry of Industry and Information Technology. The Ministry of Industry and Information Technology said that the four companies would be stopped from producing and selling problematic models; the companies would be suspended from applying for the recommended models for the promotion and application of new energy vehicles, and the problematic models would be removed from the "Catalogue of Recommended Models for the Promotion and Application of New Energy Vehicles"; and the companies would be ordered to make rectifications within six months.

In addition to the above four typical enterprises, the Ministry of Industry and Information Technology also "named" 7 enterprises. On February 4, 2017, the Ministry of Industry and Information Technology issued fines to 7 automobile companies, including Jinhua Youth Automobile Manufacturing Co., Ltd., SAIC Tangshan Bus Co., Ltd., Chongqing Lifan Passenger Vehicle Co., Ltd., Zhengzhou Nissan Automobile Co., Ltd., Shanghai Sunwin Bus Co., Ltd., Nanjing Special Automobile Manufacturing and Assembly Plant Co., Ltd., and Chongqing Hengtong Bus Co., Ltd. The penalty resolution shows that the 7 companies are suspended from applying for the qualification of recommended models for the promotion and application of new energy vehicles and are required to make rectifications as required.

As of the date of publication, except for GMIC whose production qualifications were revoked, the other 11 companies "named" by the MIIT have completed rectification work, and their production consistency assurance capabilities meet the requirements of relevant regulations. The MIIT recommends that their qualifications for applying for recommended models for the promotion and application of new energy vehicles be restored.

How is the market situation of the fined companies this year?

When the above-mentioned enterprises were "named" by the Ministry of Finance or the Ministry of Industry and Information Technology, various penalties were imposed. Being fined was a small matter, but being suspended from the recommended catalog and being required to make rectifications was a big blow to the enterprises, which seriously affected their production and sales activities. So after this period of rectification, how have the enterprises recovered?

1) Suzhou King Long can be regarded as an outstanding enterprise in the new energy bus industry, but once the punishment was issued, its parent company King Long Automobile could not escape being implicated.

King Long Motors said that since Suzhou King Long received a penalty decision from the Ministry of Finance and the Ministry of Industry and Information Technology, it has been unable to accept new energy bus orders since September 2016, and the company's new energy vehicle sales revenue has dropped significantly, causing the company's operating income to decline. In the end, King Long Motors' net profit attributable to shareholders of listed companies in 2016 was a loss of 719 million yuan, a year-on-year decrease of 234.26%.

However, the author of Electric Vehicle Resource Network noticed that Suzhou Kinglong has applied for a number of new energy bus products this year and has made a lot of preparations in the reserve of new products. But as the competition becomes more and more fierce, it is still unknown whether Suzhou Kinglong can make a comeback after being absent for nearly a year.

2) Shenzhen Wuzhoulong has been active this year and has frequently appeared in the public eye. It has also put a lot of effort into hydrogen fuel cells, but the company's new energy vehicle business has not yet improved; Shaolin Bus and Chery Wanda have relatively small market influence and market share in the new energy vehicle industry, so the impact of the absence of the recommended catalog on the companies can be imagined. These three companies are rarely seen in several batches of new energy vehicle products this year.

3) Zhengzhou Nissan was originally responsible for the main production and sales tasks of Dongfeng Motor, but the development in the past two years has not been optimistic, and the performance has continued to decline. The author of the Electric Vehicle Resource Network learned that as of December 31, 2016, the book value of Zhengzhou Nissan's total liabilities was 7.003 billion yuan, and the total liability book value after evaluation was 6.664 billion yuan. It can be seen that the development of Zhengzhou Nissan is not smooth, and neither the traditional automobile business nor the new energy automobile business has created too many surprises for the company.

The author of Electric Vehicle Resource Network learned that Dongfeng Motor Co., Ltd. reviewed and approved the proposal of the equity of its holding subsidiary Zhengzhou Nissan at the recent shareholders' meeting. Zhengzhou Nissan was separated from Dongfeng Shares and upgraded to be directly managed by Dongfeng Limited. It remains to be seen whether Zhengzhou Nissan can quickly seize the commanding heights of the market after the separation.

4) According to the Electric Vehicle Resource Network, Lifan has sold 1,256 new energy vehicles this year, down 11.55% year-on-year. Since the beginning of this year, the entire market has been sluggish due to the adjustment of new energy vehicle subsidy policies. Therefore, Lifan's performance is already good.

5) The author of Electric Vehicle Resource Network learned that the Shanghai Economic and Information Commission had previously issued a public notice on the settlement of the city's application for the 2016 national new energy vehicle subsidy funds. Among them, the 14 new energy vehicles promoted by Shanghai Shenwo can obtain a subsidy of 7 million yuan, which is a big benefit for Shenwo; in addition, Shanghai Shenwo has also declared some new new energy vehicle products, and the company is gradually getting on the right track.

6) It is understood that from January to May this year, Hengtong Bus sold a total of 33 buses, a year-on-year decrease of 92.47%. Hengtong Bus has completed the rectification and some of its products have been included in the recommended catalog. Therefore, new energy buses with higher gross profit margins continue to be the company's main focus.

Have the qualifications for applying for recommended catalogs been restored?

To date, the rectification work of these 11 fined enterprises has yielded results. Let’s first look at the seven enterprises with less serious offenses. On April 18, 2017, the Ministry of Industry and Information Technology issued a public notice to restore the qualification of the six enterprises except Nanjing Special Automobile to apply for the recommended catalog.

The Electric Vehicle Resource Network checked the fourth and fifth batches of recommended catalogs this year and found that Jinhua Youth Automobile, Shanghai Sunwin, Hengtong Bus, Lifan Passenger Vehicle and Zhengzhou Nissan are all included in the recommended catalogs, and the number of models is also relatively optimistic. In other words, these companies have gotten rid of the impact of "subsidy fraud" and can compete fairly with other companies.

Due to the differences in the rectification progress of the companies, Nanjing Special Vehicles was only recently recommended by the Ministry of Industry and Information Technology to resume its qualifications for applying for the recommended catalogue, so Nanjing Special Vehicles will have to wait a little longer before being included in the recommended catalogue.

After six months of rectification, the Ministry of Industry and Information Technology issued a notice on the evening of June 29, 2017, suggesting that the qualifications of four typical enterprises to apply for the recommended catalog should be restored. However, the notice will not end until July 5, and according to the issuance rules of the recommended catalog, it is expected that these four enterprises will have to wait until the end of July or early August.

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.