AutoBeta(AutoBeta.net)09/03 Report--

Since the middle of 2018, the trend of car sales in China has been declining for more than a year. In this year when the car market suffered a cold spell, the sales of new energy vehicles have maintained a strong growth trend, which can be described as going against the trend. However, under the background of the overall downturn in the automobile market, the new energy vehicle market also seems to have issued a "warning signal" in July.

According to data released by the China Automobile Association, China produced 84000 new energy vehicles in July, down 37.2 percent from the previous month and 6.9 percent from the same period last year. 80, 000 new energy vehicles were sold in July, down 47.5 percent from the previous month and 4.7 percent from the same month last year. In July, the growth rate of production and sales of both pure electric passenger cars and plug-in hybrid passenger cars was negative.

This is also the first decline in the domestic new energy vehicle market compared with the same period last year, although the subsidy transition period ended on June 25, and July sales were affected by early overdraft. however, the radical sales targets set at the beginning of the year are still falling short of the major car companies under the deep freeze in the car market.

According to the actual production and sales in the first half of the year and the annual production and sales target of 1.6 million new energy vehicles predicted by the Automobile Association in the middle of the year, the completion rate of the industry's target sales of new energy vehicles in the first half of the year is less than 40 per cent.

The target completion rate of sales in the first half of the year is generally concentrated between 30% and 40%. Among them, the target completion rates of new energy vehicle leader BYD and BAIC New Energy for the first half of the year are 34.8% and 29.6% respectively, both lower than the industry average. GAC NE and Chery New Energy sales target completion rates in the first half of the year are close to 30%. Geely and Jianghuai performed relatively well, with 57.6% and 48.8% respectively.

Not only the sales target has not been achieved, but also the car companies have lowered their new energy sales targets one after another. The generally low sales target completion rate in the first half of the year will add to the pressure in the second half of the year. Although according to the previous law, there is the possibility of a "warped tail" in the second half of the market, there are more uncertainties in the second half of 2019, and it is more difficult for the industry and enterprises to achieve the full-year targets previously set.

In response to the frequent fluctuations in the market in the first half of the year, the China Automobile Association announced in July that it would lower its production and sales target for new energy vehicles this year from 1.6 million to 1.5 million. BAIC New Energy has been reduced from 220000 to 150000 and BYD from 400000 to 350000. SAIC and Geely also lowered their annual sales target by 30-50, 000 units.

Compared with traditional car companies, the new power car-building is also lost. Among the current car-building new forces, the top three, Weimar, NIO and Xiaopeng, have handed over their half-year transcripts, which are also far from the original goal. In particular, Weima, which called out the target of 100000 units, sold less than 10,000 units in half a year. Weimar said that 100000 units is the profit and loss line of the new power of building cars. As for things like uniting, zero running, and the future, they have gradually faded out from the eyes of domestic consumers, and the situation of marginalization seems to be difficult to reverse.

However, some people in the industry are still optimistic about the new energy vehicle market, they believe that the fluctuation is temporary, growth will still be the main theme of the domestic new energy vehicle market in the future.

The sharp decline of subsidies has led to a sharp increase in the cost of new energy vehicle companies, which have to fill the hole caused by subsidies by raising prices or improving technology. The downward trend of the new energy vehicle market, coupled with the imminent entry of foreign enterprises, will further aggravate the fierce market competition among new energy vehicle enterprises, and the annual delivery targets of some car companies are likely to be difficult to achieve. this will also aggravate the cash flow tension of new energy vehicle enterprises to a certain extent. For the new power of car-building, the test may be even more severe.

It is also a helpless move for car companies to lower their sales targets. In order to really cultivate the electric car market, we should not only jump out of the original idea of subsidy, but also get rid of the dependence on big customers. The withdrawal of the subsidy policy will give more guidance to market competition, and the current "decline" is the beginning of the survival of the fittest and the beginning of structural adjustment. A mature new energy vehicle market must be a market that has experienced ups and downs, joys and sorrows, and precipitation, and must be an open market with both potential and pressure, opportunities and challenges.

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