Since the end of 2015, China issued the "Notice on financial support policies for the promotion and application of new energy vehicles in 2016-2020" to officially carry out subsidies for new energy vehicles, and the subsidies have been extended for 2 years due to the epidemic in 2020, and have been maintained for 6 years. The addition of subsidies not only points out the development direction of China's emerging development of the new energy automobile industry chain, but also supports the difficult rise of new industries in the early stage.
Judging from the situation of subsidy decline in previous years, the overall sales of new energy vehicles in 2019 fell slightly by 4%, the overall sales volume in 2020 increased by 13%, and the sales of new energy vehicles this year are expected to increase significantly by 1.5 times, which shows that the impact of subsidies is gradually decreasing, 2022 will be the last year of new energy vehicle subsidies, and this entire subsidy cycle represents the core driving force of the new energy vehicle industry chain from the previous subsidy promotion to today's market drive, which also indicates that a new cycle is coming.
In this report, wall street insight research attempts to dissect the following sections:
(1) As a subsidy termination year, how much will the subsidy decline in 2022? How big is the impact of beneficiary car companies?
(2) Who are completely unaffected by this subsidy decline?
(3) Where is the only point where the subsidy decline in 2022 exceeds expectations?
1. What is the subsidy decline in 2022? How big is the impact?
On December 31, the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the National Development and Reform Commission issued the Notice on the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles in 2022, which clearly stated that the current framework and threshold requirements for the technical indicator system of purchase subsidies will remain unchanged in 2022, but the subsidy standards for new energy vehicles will decline by 30% on the basis of 2021. Among them, urban buses, road passenger transport, taxis (including online car-hailing), sanitation, urban logistics and distribution, postal express, civil aviation airports and vehicles in the field of party and government organs that meet the requirements, the subsidy standard will be reduced by 20% on the basis of 2021.
Wall Street Insight Research believes that because the policy has maintained the same technical indicator requirements, but the technical level of the power battery itself has been greatly improved, while the sales of new energy vehicles have also increased greatly, although the subsidy range has dropped by 30%, but the number of models and electric vehicles that can meet the subsidy standards will be more, and the loss of subsidies can be appropriately compensated through the increase in sales.
According to the latest standard calculation, the price of new energy passenger cars before subsidies needs to be less than 300,000 yuan (power exchange mode vehicles are not subject to this regulation), and the amount of subsidies for pure electric models with a range greater than 400km will be reduced by 5400 yuan next year, the subsidy for 300-400 kilometers will be reduced by 4000 yuan, the plug-in mix, the increase in range will be reduced by 2000 yuan, and the cost of each vehicle of car companies will only rise by less than 2% in 2021. For example, BYD's sales of new energy vehicles in 2021 exceeded 600,000 units, an increase of 218% year-on-year, so it can use the huge volume of new energy vehicles to make up for subsidy losses for car companies.
2. Who are not affected by this subsidy decline at all?
Previously analyzed the impact of this subsidy decline on the beneficiary groups, but the new energy vehicle subsidy itself is only for pure electric passenger cars priced below 300,000 yuan, in other words, high-end new energy vehicles priced higher than 300,000 yuan are not within the scope of subsidies, and the endurance standards themselves are not up to standard models such as A00 series models, as well as some A0 series models are not affected at all.
Among the electric vehicles that have been listed, the high-end explosive models of many high-quality car companies that have repeatedly reached new highs are not affected by the amount of subsidies, such as Weilai's ES6, ET7 and other models, some high-end models of GAC New Energy Aion LX, Tesla Model X and Model S, etc., the price before subsidies is more than 300,000 yuan, and the production and sales of this part of the model are not affected by the subsidy decline.
And the A00-class models and A0 models of the rise of car companies such as the development of the national God car Wuling Hongguang mini EV SAIC-GM-Wuling, small ants of Chery, good cat series of Great Wall Motors, etc. have a relatively large model market, and the production and sales of this part of the new energy vehicles are completely unaffected by the decline in subsidies, from January to November this year, the sales of A00 series new energy cars reached 771365, accounting for more than 30% to 30.7%, and the sales of A0 series new energy SUVs reached 137093. The proportion also reached 5.5%, and the overall market of the two models plus super-new energy vehicles was 36%.
Wall Street insight research believes that the high-end models listed in China's car companies into the luxury car series of strong promotion, the future price reduction to less than 300,000 to obtain subsidies is unlikely, so the impact is not large, and the promotion of A00 series models and A0 series models of some car companies are mainly based on the consideration of new energy double integration, under the current price of new energy points, The negative incentive to reduce the production of new energy vehicles is about 15,000-20,000 yuan, even if the subsidy for new energy vehicles has declined in 2022, the production of new energy vehicles is still the first choice of traditional car companies that lack points, so the impact is not large.
3. The subsidy in 2022 may run through the whole year
The notice of the subsidy decline clearly takes December 31, 2022 as the subsidy termination date, and in the previous 2020 policy provisions, it was capped at 2 million vehicles, which may indicate that the scale of subsidy will be changed from the original 2 million vehicles to physical sales, and there is no limit. In fact, the drawbacks of setting limits this year have been reflected, and from January to October this year, the national new energy vehicles that I met the subsidy standards have exceeded the upper limit of 2 million vehicles, and there is actually no subsidy to be taken in the next few months. Considering the growth rate of new energy vehicles, the sales of new energy vehicles next year are expected to reach 4.5 million to 5 million vehicles, if the ceiling ceiling is opened next year, car companies will actually still benefit a lot.
It is worth mentioning that the previous new energy subsidy policy in the United States in 2009 also clearly stipulates the ceiling of the number of 200,000 PHEV and EV that a single car company can subsidize, halve the tax credit within 6 months after the sale of the 200,000th car, halve it again in the next 6 months, and then completely cancel the subsidy.
With the rapid development of new energy vehicles, the sales of new energy vehicles of major car companies have surged, Tesla, GM and other car companies that are at the forefront of new energy vehicles have actually all such subsidies have long since declined, and other car companies are also close to the on-line standard, which is why Tesla has changed the trend of the usual price reduction since August this year, and has made 5 consecutive price increases, because there is no subsidy to be taken in the US policy. In order to keep pace with the subsidy policy, the limit of up to 200,000 vehicles per single car company has been abolished in the latest new energy vehicle policy to be released in the United States, which is similar to China's subsidy revision.