“Whether from the perspective of technological innovation or industrial layout, the era of fuel vehicles’ domination of the rivers and lakes is basically over.” At the end of the third quarter of 2021, this view has already reached a consensus in the global automobile industry. At present, driven by the “dual carbon” strategy, China’s auto industry is also accelerating its development towards low carbon, and the development of new energy vehicles is ushering in new opportunities.
The latest automobile production and sales data released by the China Automobile Association shows that in the first eight months of this year, the production and sales of new energy vehicles reached 1.813 million and 1.799 million respectively, a year-on-year increase of 1.9 times. Among them, the penetration rate of new energy vehicles in August has increased. To 17.8%, the penetration rate of new energy passenger vehicles is close to 20%.
In this context, the industry generally believes that new energy vehicles are expected to achieve the medium-term development goal of “20% penetration rate of new car sales by 2025” ahead of schedule. At the same time, as an important part of the pure electric drive strategy of my country’s new energy vehicles, it is also a plug-in hybrid (PHEV) model with more energy saving and emission reduction advantages at this stage.
“The PHEV market that covers common mileage in urban areas is very promising. It will be very popular in the market by 2035, and it will eat up the market for fuel vehicles.” Ouyang Minggao, academician of the Chinese Academy of Sciences and vice chairman of the China Electric Vehicle 100 Association This is what the 100 People’s Association imagined at the recent seminar on “Automotive Technology Innovation and Policy Suggestions in the Era of Power Diversification”.
But facing 5-15 years, or even longer, how much can the peak of the PHEV market scale reach? When will it appear again? It is worth thinking about how the upper and lower levels of my country’s auto industry chain should respond.
The 20% penetration rate of new energy vehicles is expected to be achieved ahead of schedule
It is undeniable that the development trend of the new energy vehicle market in 2021 has exceeded everyone’s expectations.
“Some car companies have disclosed that their electric vehicle sales penetration rate in August has exceeded 30%, and it is expected to be around 15% for the whole year.” Zhang Yongwei, vice chairman and secretary-general of the China Electric Vehicle 100 Association, said that according to this trend, my country is expected to achieve the medium and long-term planning target of 20% market share of new energy vehicles in 2025 ahead of schedule.
It is well known in the industry that in the second half of 2020, the “Technical Route 2.0 for Energy Saving and New Energy Vehicles” and “New Energy Vehicle Industry Development Plan” will be released one after another. The goal of 20% is once again firm in the development direction of my country’s automobile electrification.
However, according to data released by the China Automobile Association, a total of 1.367 million new energy vehicles will be sold in my country in 2020, accounting for 5.4% of the annual sales of new vehicles. There is a huge space between this proportion and the medium and long-term planning target of 20% market share of new energy vehicles in 2025.
At that time, Xin Guobin, vice minister of the Ministry of Industry and Information Technology, shouted at the regular briefing of the State Council policy: “This is a difficult goal to achieve.” Based on this, at the end of last year, the China Automobile Association predicted in its “2021 China Automobile Market Forecast Report” that the total automobile sales in my country in 2021 are expected to reach 26.3 million units, an increase of about 4% year-on-year, of which the sales of new energy vehicles are 1.8 million units, a year-on-year increase. An increase of about 40%.
But no one would have thought that with the extraordinary performance of many car companies such as Tesla, BYD, and Wuling Hongguang, the development of the new energy vehicle market in 2021 will be so rapid. In this context, the National Passenger Vehicle Market Information Joint Conference stated on June 8 that due to the overall strengthening of the domestic market segments, the forecast sales of new energy passenger vehicles this year have been raised to 2.4 million.
But obviously, 2.4 million is not the end.
Zhang Yongwei bluntly said that at present, the industry generally believes that the annual sales of new energy vehicles in China is expected to reach about 2.5 million to 3 million units, and it is expected to reach an annual sales scale of 5 million units next year. Under this growth rate, about 20% of the new energy vehicle market The medium and long-term planning target of the share will likely be advanced to 2022 or 2023.
Whether the end point of PHEV penetration is 3% or 40% is the question
To this day, no one has questioned the development trend of pure electric vehicles. The “transition” fate of PHEV has not been subverted because of its advantages in energy saving and emission reduction compared with EV at this stage, but the “transition” is timely. The long run is stronger and far-reaching than expected.
According to the “Technical Route 2.0 of Energy Saving and New Energy Vehicles” (hereinafter referred to as Route 2.0) for the future development of new energy vehicles, the sales volume of new energy vehicles in my country will account for 15-25% of the total vehicle sales by 2025, of which the sales of pure electric vehicles will account for more than 90%.
According to the 25 million vehicle market in 2025, the penetration rate of new energy vehicles will be 25% in 2025, accounting for 6.25 million vehicles, of which pure electric vehicles (EVs) will reach 5.625 million vehicles. The annual sales of electric hybrid vehicles (PHEV) may only be 625,000 units, and the penetration rate is less than 3%. Even if the market size of 25 million vehicles is applied to a series of planning goals in 2035, the penetration rate of PHEVs may not exceed 3% at the highest, and the annual sales will be less than one million.
But will this be the case? Obviously not.
From the perspective of BYD alone, “Since the launch of the DM-i super hybrid model in March this year, BYD has achieved 50% sales of PHEV and EV models, and our production capacity is still increasing, and sales continue to climb.” Yang Dongsheng, director of BYD’s New Technology Research Institute, revealed.
Specifically, according to the latest sales data released by BYD on the Hong Kong Stock Exchange, its new car sales in August were 68,531 units, an increase of 86.32% year-on-year. Among them, the proportion of BYD’s PHEV sales in August further increased to 43.96%, an increase of 31.21 percentage points from its PHEV sales in January this year, which accounted for 12.75%.
Based on this, three PHEV models of BYD’s Qin PLUS DM-i, Song DM and Tang DM were among the top 15 new energy vehicle sales in August released by the Passenger Federation. It is worth noting that the other non-pure electric model in the list is the Ideal ONE, a model that makes Li Auto “single-handedly” firmly in the top three of the new power rankings, and supports Li Auto’s brave entry into the US and Hong Kong stocks.
And according to the ideal car’s plan, it will also launch three extended-range electric vehicles (REEV) in the next year and the next year, because in their perception, the PHEV market (including REEV) is still promising.
“In 2025, the domestic passenger car market will reach a scale of 25 million units, of which the sales of traditional internal combustion engine vehicles (ICE) covering hybrid vehicles (HEV) will account for about 40% or 10 million units, while the sales of PHEV models will account for about 40%. It will also reach 40%, occupying the market size of another 10 million vehicles, and the remaining 5 million vehicles will be EV models.” Ma Donghui, co-founder of Li Auto, said.
However, Wang Hewu, deputy secretary-general of the Electric Vehicle 100 Association, insisted on a rational view of the future development trend of PHEVs. In his view, with the further improvement of pure electric technology, especially the improvement of battery energy density and safety, as well as the improvement of charging infrastructure and the use of fast charging technology, the driving range of pure electric vehicles will increase to 800km or even more than 1000km , the proportion of PHEV models will decline. “We judge that by 2035, the market share of PHEVs will be 15%-17%, and EV vehicles will be more than 50%, so that the market share of new energy vehicles will reach more than 2/3.”
In comparison, the market share of 15%-17% far exceeds the 3% expected in “Route 2.0”, but it is still much more rational than the 40% imagination, but even so, it is still not easy to achieve this goal. thing.
The “chaotic” battle of car companies is imminent, and policies, markets and products are indispensable
With the release of the long-term goal of fully electric drive in 2035 in the “Technical Roadmap for Energy-Saving and New Energy Vehicles 2.0”, and under the multiple pressures of policies such as “dual carbon” goals and “dual points”, PHEVs are represented. Hybrid models have become one of the primary directions for many local car companies to seek transformation at this stage, and according to various new product plans, my country will usher in a new year of hybrid vehicles from 2022 to 2023.
Facing the future, Ouyang Minggao believes that “the PHEV market covering common mileage in urban areas is very large, and it will be very popular in the market before 2035. It will eat up the market of fuel vehicles.” At the same time, he further pointed out that compared with pure The “dumbbell” structure of electric vehicles, PHEVs will be promising in the A- and B-segment car market, because in the price range of 100,000-200,000 yuan, consumers require long mileage, good performance and lower cost, and PHEVs can be better than EVs. such needs.
But what we still need to know is that the PHEV market has great prospects. At this stage, it needs to be further optimized from the guidance of national and local policies, to industrial planning, and to products.
Still taking BYD as an example, in order to create a more energy-efficient and efficient hybrid system, it has developed the only mass-produced hybrid engine in China, with a thermal efficiency of 43%. In addition, the BYD DM-i super hybrid system also includes a set of dual-motor EHS electric hybrid system consisting of a drive motor and a generator “2-in-1”, and a set of high-capacity and high-power DM-i super hybrid dedicated power type Blade battery. Then, whether the high R&D expenses and related costs invested in this early stage can be shared on a large scale determines how far the hybrid road of traditional car companies such as BYD can go.
BYD DM-i hybrid system (Image source: BYD)
“At least for now, it is difficult for companies with annual shipments of less than 500,000 vehicles to achieve final success,” said a senior analyst at Gasgoo Automotive Research Institute. Recently, some foreign media reported that Mercedes-Benz will only launch a pure electric vehicle platform in the future, and fuel vehicles will continue to be sold in the future, but will not continue to develop new PHEV technology.
Based on this, Yang Dongsheng believes that the current small profits of new energy vehicles still need to rely on the dual drive of national policies and the market. “With the escort of national policies and the efforts of our company to reduce costs, we believe that if the price of fuel vehicles is increased by 10,000 yuan, it may be the real market choice for consumers.” He further suggested, “I hope the policy With long-term continuity, we hope to have continued support for EVs and PHEVs, whether from vehicle purchase tax, consumption tax, etc.”
In addition, Ouyang Minggao said bluntly, “It is not recommended for new car manufacturers to develop PHEVs (technically speaking, range extension is also a special plug-in), because engines are the weak point of new car manufacturers, and you can choose any engine from the market. , it is difficult to meet the requirements of fuel consumption and emissions.”
“We believe that PHEV is a soft landing for new energy vehicles, and the impact on our industrial chain is relatively soft, regardless of the traditional industries of the engine industry, gearbox industry, and the oil industry. , so that new energy is deeply rooted. Because new energy is not only an energy revolution, but also a technological revolution.” Yang Dongsheng said.
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