New energy vehicle promotion catalog review market sales may be affected

Yesterday, the official website of China Machinery Vehicle Technical Service Center released the "Notice on Adjusting the Application of the Catalog of Recommended Vehicle Models for the Promotion and Application of New Energy Vehicles" (hereinafter referred to as the "Catalog")" (hereinafter referred to as the "Notice"), clearly announcing that: in accordance with the relevant requirements of the "Notice on Adjusting the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles" and other documents, the center will be responsible for organizing the acceptance and review of the application materials for the "Catalog" entrusted by the Ministry of Industry and Information Technology; the first to fifth batches of the "Catalog" released in 2016 need to be re-verified, and enterprises should apply according to the new technical requirements. In this regard, industry insiders pointed out that there were 2,193 models that had been shortlisted for the first to fifth batches of the "Catalog", and the re-verification may have a greater short-term impact. The new energy vehicle market, which had "exploded" in December last year, may see a sharp decline in sales month-on-month.

The Notice shows that the competent authorities have put forward higher and clearer requirements for the technical level of new energy vehicles. The Notice points out that new energy vehicle companies and products that apply for the Catalog should meet the following relevant requirements: including the relevant technical requirements of the Notice on Adjusting the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles and other documents; non-fast-charging pure electric buses, fast-charging pure electric buses and fuel cell vehicles must meet the requirements of "system energy density", "fast-charging rate", "fuel cell system rated power" and "fuel cell vehicle pure electric driving range" respectively; new energy vehicle companies should build and improve the monitoring platform in accordance with the requirements of the Notice on Further Improving the Safety Supervision of the Promotion and Application of New Energy Vehicles; bus products should comply with the "Safety Technical Conditions for Electric Buses", etc.

Entrusted by the Ministry of Industry and Information Technology, the China Machinery and Rolling Stock Technology Service Center is responsible for organizing the acceptance and review of the "Catalog" application materials. The "Catalog" application acceptance and review work will be implemented from the date of the issuance of the "Notice", that is, from January 5 (the center's official website publicly disclosed on January 8). In December last year, the Shanghai Securities News exclusively reported that the models that have been shortlisted in the new energy vehicle promotion catalog will face re-examination. According to regulations, only new energy models that have entered the "Catalog" can get subsidies.

In an interview with reporters, several car company executives said that in order to meet the new standards, it will take a certain amount of time from research and development, production, testing to approval, and it is expected that these tasks will be completed in the second quarter of this year. Therefore, in the first quarter of this year, new energy vehicles will not be able to enjoy the subsidy policy. Many car companies are worried that the sales of new energy vehicles will decline sharply month-on-month at the beginning of this year. This has a precedent in the first quarter of 2016: last year, because the support policy for new energy vehicles in Shanghai and other places was not yet launched (until April 1). From January to March, the application and processing of free license plates for new energy vehicles in Shanghai were suspended, and some consumers chose to wait and see. It was not until the policy was introduced in April that the sales of new energy vehicles in Shanghai saw a blowout. Take the SAIC Roewe e550 plug-in hybrid sedan as an example, its sales in April 2016 accounted for more than half of the total sales in the first four months.

The re-examination of the first five batches of models shortlisted in the "Catalog" will put those companies with weaker technical strength under great pressure. Dongxing Securities (19.680, -0.41, -2.04%) pointed out in its research report: "In the first quarter of 2016, the Ministry of Industry and Information Technology released the first three batches of the "Catalog", with an average of one batch per month. At the same time, many commercial vehicle companies arranged production according to the models applied for the fourth batch of the "Catalog". However, affected by the investigation of "subsidy fraud", the fourth batch of the "Catalog" was suspended for eight months." Due to uncertainty about whether the models sold can be included in the "Catalog", car companies are also uncertain whether they can get national and local subsidies. Therefore, buyers dare not purchase and car companies dare not sell, resulting in serious inventory backlogs of new energy vehicle companies in the second and third quarters of last year. By November last year, when the reporter investigated, it was found that although some car companies produced and delivered relevant models according to orders, they still waited until the "Catalog" was announced before officially announcing the sale. This also led to a blowout in the sales data of new energy vehicles in December. Wang Cheng, deputy director of the Beijing department of the China Automotive Technology and Research Center, revealed that in December last year, domestic sales of new energy vehicles exceeded 110,000 units, accounting for about 21.27% of the annual sales.

At present, in the short term, 2,193 models in the first five batches of the "Catalog" will be affected by the re-examination. According to statistics, among these 2,193 models: 493 models from 95 companies were shortlisted for the fifth batch of the "Catalog"; 678 models from 116 companies were shortlisted for the fourth batch of the "Catalog"; 309 models were selected for the third batch of the "Catalog"; 466 models were selected for the second batch of the "Catalog"; and 247 models were shortlisted for the first batch of the "Catalog".

Among them, bus companies will be the first to be affected. Relevant data show that bus companies have received a large amount of subsidies. On December 31, 2016, Sugon Auto (9.020, 0.00, 0.00%) announced that "the holding subsidiary Dandong Huanghai received 542 million yuan of liquidation funds for the 2015 national new energy vehicle application promotion subsidy transferred by the Dandong Municipal Finance Bureau on December 30." Jiangte Motor (12.250, 0.00, 0.00%) announced on December 28 that "the wholly-owned subsidiary Jiangsu Jiulong Automobile will receive 1.0844 billion yuan in subsidies for the promotion and application of new energy vehicles in 2015 (the first batch). On December 27, the company received a notice from Jiulong Automobile that it had received the remaining 584.4 million yuan of the subsidy. On December 16, Jiulong Automobile received 500 million yuan of the subsidy funds allocated in advance." Also in December last year, Yutong Bus (19.550, -0.02, -0.10%) also announced that: "The company should receive 3.23 billion yuan in national subsidies for the promotion of new energy vehicles in 2015."

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.