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With the sharp reduction in subsidies, sales of new energy vehicles have declined for three consecutive months, in sharp contrast to the rapid growth in the same period last year. According to the data of the Passenger Association, the sales volume of new energy narrow passenger cars in September was 61,000, down 34.8% year-on-year and 4.2% month-on-month. The rare decline in sales of new energy vehicles for three consecutive months, with a year-on-year decline of 3.8% in July and 21.7% in August, showing an increasing trend of monthly decline, and the monthly decline far exceeded the decline of the overall passenger car market.

The sales volume of new energy vehicles continued to decline, mainly affected by the decline in market demand and the sharp decline in subsidies.

Since June 25, the new policy of subsidies for new energy vehicles has been officially implemented in 2019. Compared with 2018, nearly 70% of subsidies have declined, local subsidies have also been cancelled, sales costs of automobile enterprises have risen, and consumers 'expenses for purchasing new energy vehicles have also increased. Subsidies have decreased, and sales of new energy vehicles relying on policy development have accelerated.

The sales of new energy vehicles mainly come from license-limited cities, and the slowdown in new energy demand in license-limited cities also leads to a decline in overall sales volume. It is understood that in the new energy vehicle market, online booking vehicles occupy a large proportion, while private users have not yet become mainstream to buy new energy vehicles.

On the whole, China's new energy vehicles are still policy-driven, and the market driving force is not strong enough. Once the policy changes, the new energy vehicle market will fluctuate greatly.

Take BYD sales data as an example, BYD new energy passenger car sales in September only 13681 vehicles, a year-on-year decline of 51%, three consecutive months of sales decline. BYD also expects that the sales of new energy vehicles of the Company will slow down in the third quarter due to multiple factors such as the decline in market demand of the automobile industry and the sharp decline in subsidies for new energy vehicles, and the overall profit of the business will also decrease significantly compared with the same period last year.

Therefore, BYD Chairman Wang Chuanfu suggested that we should further restrict traditional fuel vehicles, gradually realize a comprehensive ban on sales, firmly support the full electrification of new energy vehicles, liberalize the restrictions on new energy vehicles in first-tier cities, and tilt the indicators to new energy vehicles in an all-round way.

According to the relevant documents of the Ministry of Finance, China implements a downward slope mechanism for financial subsidies for new energy vehicles. The purchase subsidies will be gradually reduced, and it is planned to cancel all subsidies after 2020. Chen Hong, chairman of SAIC Group, said that after the cancellation of purchase subsidies in 2020, if there is no other policy follow-up, due to the sharp rise in the purchase cost of new energy vehicles, it is likely to lead to a "cliff-like" decline of about 40% in China's new energy vehicle market, especially pure electric vehicles.

To this end, Chen Hong suggested that the policy focus of new energy vehicles could shift from "purchase subsidies" to "multiple policy combinations".

It can be seen that under the relevant support policies for many years, the new energy automobile market has not formed a real market-driven, and the status quo of relying on policies for survival has not yet been shaken off.

Under the reality that subsidies are about to withdraw completely, the state will continue to support new energy vehicles. In June this year, the National Development and Reform Commission, the Ministry of Commerce and the Ministry of Ecological Environment have issued relevant implementation plans, requiring all localities not to impose restrictions on new energy vehicles, and those that have been implemented should be cancelled. In August, relevant documents of the General Office of the State Council clearly encouraged qualified places to give active support to the purchase of new energy vehicles.

Under the condition of substantial reduction of subsidies, the sales volume of new energy vehicles has fallen for three consecutive months, and the decline trend has expanded, which leads to the pressure of sales volume and profit of new energy automobile enterprises, especially for the new automobile power enterprises that have been pouring in in the early years, bankruptcy or bankruptcy will soon begin.

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