New energy vehicle industry: Avoid fraudulent subsidies and qualifications

Recently, there have been rumors about the suspension of new energy vehicle production qualification approval. After contacting relevant people from the Ministry of Industry and Information Technology, there was no accurate response. Industry insiders believe that such rumors have become an industry "routine" and both companies and industry insiders can understand it. Judging from some emerging car manufacturing companies that have obtained production qualifications, some companies that have obtained qualifications with the help of local governments have made slow progress in product technology in the future. The qualifications they have obtained may become another form of capital that is transferred in disguise, which is equivalent to the nature of new energy vehicle subsidy fraud.

Rumors of suspension of new energy vehicle production qualification approval

In early June, the Economic Observer broke the news that among the 15 new energy vehicle companies that obtained new energy production qualifications, only BAIC New Energy and Yuntu New Energy were included in the Ministry of Industry and Information Technology's "Announcement on Road Motor Vehicle Production Enterprises and Products". Other companies made slow progress after obtaining qualifications, which led to industry rumors that the issuance of new energy production qualifications had been suspended.

Against the backdrop of the country's encouragement of the development of new energy vehicles, many companies have begun to move into the new energy vehicle industry. Since the National Development and Reform Commission and the Ministry of Industry and Information Technology issued the "Management Regulations for Newly Built Pure Electric Passenger Vehicle Enterprises" in 2015, 15 companies have obtained new energy production qualifications, but only two companies have actually entered the "Announcement" of the Ministry of Industry and Information Technology.

Based on the policy approval process, there are two thresholds for the production and sale of new energy vehicles: 1. Access to vehicle manufacturers; 2. Access to vehicle manufacturers’ products;

Production enterprise access

Enterprise product access

The review of vehicle manufacturing enterprise access is relatively easy. The head of a company that has obtained the qualification revealed: Regarding the issue of obtaining enterprise production qualifications, as long as the company meets the established conditions, it can successfully obtain the qualification with the assistance of relevant local governments.

Audit methods: adopt various audit methods. Understand the company profile, on-site visit; review documents, materials, records; spot check process, product and equipment conditions; observe operation (combined with production, inspection and development process, you can ask the responsible personnel to demonstrate or introduce); talk with employees (technical personnel, management personnel, key special process operators), ask questions, etc.

For the product review of new energy vehicle companies, one of the items, "product technical review", is a relatively high threshold.

According to the engineering and technical leaders of relevant vehicle manufacturers, the companies that have previously obtained production qualification review have many technical shortcomings, and it is not realistic to expect to solve the technical problems during the product announcement review period. Through the visits he participated in, he found that the companies lack talent foundations from management to engineering, which can be said to be "grassroots teams", let alone using this to gain more technical cores.

Based on this, relevant departments have realized the problem and may coordinate and promote the dual standards of enterprise access and product access in the future, which may also interrupt enterprises' idea of ​​applying for enterprise production qualifications first.

Prevent new energy vehicles from "subsidy fraud" to "qualification fraud"

In recent years, in response to the country's call for energy conservation and environmental protection and the vigorous development of new energy, new energy vehicle companies have sprung up like mushrooms after rain, and it is said that there are already thousands of them. In this process, a large number of companies that rush to build cars start with national and local subsidies, so "subsidy fraud" appears.

On August 12, 2016, the Ministry of Industry and Information Technology of China announced the "Regulations on Access Management of New Energy Vehicle Production Enterprises and Products (Revised Draft for Comments)", which significantly raised the entry threshold for new energy vehicle companies, making it increasingly difficult for companies to obtain production qualifications, and also avoiding the problem of fraudulent subsidies to a certain extent.

After the regulations were issued, 15 companies passed the review and qualification review, including: BAIC New Energy, Chery New Energy, Jiangling New Energy, Changjiang Automobile, Wanxiang Group, Jiangsu Minan, Chongqing Jinkang, NEVS, Qiantu Automobile, Lanzhou Zhidou, Yundu New Energy, Henan Suda, Zhejiang Hezhong, Landwind, JAC Volkswagen, etc. The production qualification of new energy vehicle companies is valid for 3 years.

Another industry insider revealed that some of the companies that passed the qualification review may have engaged in opportunistic practices. This news was interpreted as the development of new energy vehicles upgrading from "fraudulent subsidies" to "fraudulent qualifications"!

The China Society of Automotive Engineers Industry Research Institute said in an interview with the media that the Ministry of Industry and Information Technology has found that some manufacturers (approved companies) have problems with their products and may need to be re-evaluated.

Li Wanli, former deputy secretary-general of the China Association of Automobile Manufacturers, also said: "The purpose of relaxing the qualification for the production of new energy vehicles is to stimulate the catfish effect and promote market development. However, the expected effect has not been seen so far, and it is necessary to adjust the approval conditions."

So who gave so many companies the opportunity to obtain birth permits? The Economic Observer reported that it was mainly due to the enthusiasm of local governments, who pushed hard behind the scenes.

According to statistics, among the 15 companies that have obtained the qualification to produce new energy vehicles, apart from the vehicle companies backed by state-owned groups such as Chery New Energy and BAIC New Energy, most of the newly emerged 10 companies have local governments behind them. For example, Yundu Automobile has shareholders including not only Fujian Automobile Industry Group but also Putian State-owned Assets Investment Co., Ltd., which is backed by Putian City, Fujian Province. Jiangsu Minan Automobile has shareholders including Jiangsu Huaian Development Holdings Co., Ltd., which is backed by Huaian City, Jiangsu Province.

Some qualified new energy vehicle companies do not have any shareholders directly invested by local governments, but have already formed an "interest alliance" with local governments. For example, Lufang Zhou signed a cooperation agreement with Gaoming District, Foshan City as early as 2010, planning to build a new energy vehicle production base with a total investment of 2.5 billion yuan and a production capacity of 200,000 vehicles. In 2015, the Foshan Municipal Government specially organized a Lufang Zhou project work meeting, and the city leaders clearly stated that all parties should take "qualification passed and project completed" as a common goal.

According to an insider, “Some applicants even commissioned others to manufacture their prototypes.”

Tian Guangyu, professor of automotive engineering at Tsinghua University and secretary general of the Electric Vehicle Division of the China Society of Automotive Engineers, believes that many companies are seeking electric vehicle production qualifications this time because license plates are a scarce resource in China, although the license plates issued this time cannot produce fuel vehicles. However, it is still very important to get this license first. If electric vehicles become profitable in the future, it would be a big pity to be unable to enter the market, or it is possible to sell the license to a third party.

Based on the above view, companies that apply for new energy vehicle production qualifications can make a fortune by reselling the relevant qualifications even if they fail to obtain product access in the future. This also reflects the motivation behind "fraudulent qualifications".

Statistics from the Ministry of Science and Technology show that there are more than 30 new energy vehicle projects under construction in various regions, and more than 170 new energy vehicle manufacturers. According to the projects approved this year in China and the production capacity planning budgets released by major automakers, by 2020, the production capacity of new energy vehicles is expected to reach 5 million vehicles, and China's new energy vehicle development has entered a period of rapid growth.

After experiencing a series of blows such as corporate subsidy fraud and subsidy reduction, the new energy vehicle industry should no longer have to endure the difficulty of "qualification fraud", but should focus on the fundamentals of technological development to drive the normal development of the industry.

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.