Details of 2019 new energy subsidy policy highlights and impact

On March 26, 2019, the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the Development and Reform Commission jointly issued the Notice on Further Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles (hereinafter referred to as the Notice), resulting in the emergence of a new round of subsidy recession policy. The Circular clearly points out that according to the factors such as the scale efficiency and cost reduction of new energy vehicles, as well as the provisions on the withdrawal of the subsidy policy, the subsidy standards for new energy passenger vehicles, new energy buses, and new energy trucks will be lowered, so as to promote the survival of the fittest in the industry and prevent the market from fluctuating sharply. What are the new changes and requirements in the subsidy policy in 2019 compared to previous years in terms of subsidy standards and technical requirements? Specifically in passenger cars, buses and trucks, what is the extent of the New Deal's decline? What is the expected impact of the policy changes on the new energy vehicle industry? Take a look at that decomposition in this article. Change 1: Pure electric vehicle subsidy downgraded to two gears, no subsidy for vehicles up to 250 KM In the pure electric passenger vehicle sector, the New Deal still provides subsidy in accordance with the mileage range, but it is simplified from five gears in 2018 to two gears, with an average overall downhill range of 50 per cent, and no subsidy is granted for vehicles previously operating in two gears below 250 km. Specific subsidy standard: the two grades of 250 ≤ R < 300 and 300 ≤ R < 400 are merged into one grade, and the subsidy amount is 18,000 yuan; The amount of subsidies for flights over 400 km was halved, from 50,000 to 25,000; In addition, the subsidy for plug-in hybrid passenger cars in the New Deal was reduced from 22,000 to 10,000; For non-private purchases or operations New energy passenger cars, the New Deal according to the corresponding subsidy of 0.7 times the amount of subsidies. Interpretation: According to the downhill standard of pure electric passenger vehicles, the downhill range of 250 ≤ R < 300 is 47%, that of 300 ≤ R < 400 is the largest, reaching 60%, and that of R ≥ 400 is 50%. Analysts at the GAI say sales of smaller electric cars with a range of 250-300 kilometers and a relatively small retreat will not shrink much in the near term; For companies with a range of 300-400 km, the strategy will be adjusted to upgrade or downgrade the range of models to minimize the impact of the subsidy downhill; Next, Class A and Class B models with a range of more than 400 kilometers will continue to grow at a faster rate. Change 2: Battery energy density bottom line rose to 125Wh/kg power battery energy density of safety and technological progress is also one of the focus of attention in the industry, the new deal once again raised the battery energy density of pure electric passenger vehicles subsidies threshold, from 105Wh/kg in 2018 to a minimum of 125Wh/kg, and the maximum subsidy multiple decreased from 1.2 times in 2018 to 1 times. Specific subsidy standard: 0.8 times for 125 (including)-140Wh/kg models; 140 (inclusive)-160Wh/kg models shall be subsidized by 0.9 times; 160 Wh/kg and above are subsidized at 1 x 100%. Interpretation: Previously rumored subsidy policies have raised energy density requirements to The fact that the maximum threshold for subsidies is still set at 160 Wh/kg in the official edition reflects the fact that the policy does not continue to pursue battery energy density excessively high, but rather takes safety and technological progress into account. Change 3: The threshold and ceiling for electricity consumption subsidies have been raised. In 2018, the relevant policies began to give additional subsidies to products with better 100 km electricity consumption (Y) of pure electric passenger vehicles. The subsidy is still in place this year, but there has been a further increase in energy standards. Specific subsidy standards: 10% (including)-20% better than the threshold by 0.8 times the subsidy; Double the allowance for vehicles better than 20% (inclusive)-35%; 1.1 x subsidy for vehicles better than 35% inclusive. At the same time, the energy consumption level of plug-in hybrid passenger vehicles is also improved. The fuel consumption of plug-in hybrid passenger vehicles with pure electric driving range less than 80km (excluding the fuel consumption of electric energy conversion) is less than 60% compared with the corresponding limit value in the current national standard of conventional fuel consumption according to the New Deal. Specific subsidy standard: for the ratio between 55% (inclusive)-60% of the model by 0.5 times the subsidy; For vehicles with a ratio of less than 55 per cent, the allowance is doubled. Interpretation: The energy consumption level index of new energy passenger vehicles is a comprehensive reflection of the vehicle design level and the advanced technology of the three power systems, involving the vehicle lightweight, electric drive level, is an important indicator to measure the development of the new energy vehicle industry. The New Deal calls for a five-percentage-point increase in the energy-consumption ratio, up from less than 65% in 2018. Raising the threshold and ceiling of subsidies will become the last Continuation of the state to formulate new energy vehicle technology development direction of reference. Change 4: Bus Single-kilowatt-hour Subsidy Reduced to RMB 100 per vehicle Subsidy Upper Limit Cut to Over Half of the New Energy Bus Subsidy, compared with 2018, the subsidy standard for all types of buses has dropped from RMB 1,000/kwh to RMB 100/kwh, among which the rapid-charging pure electric buses have the largest decline, directly from RMB 2100/kwh to RMB 900/kwh. In addition, the ceiling on bike allowances for all types of buses has been halved. On the technical threshold, the energy consumption per unit mass load (Ekg) of non-fast charging pure electric buses shall not be higher than 0.19 Wh/km ? kg, the energy density of battery system shall not be lower than 135 Wh/kg, and the driving range shall not be lower than 200 km (constant speed method); The quick charging rate of the fast charging pure electric bus is higher than that of 3C; Plug-in hybrid electric buses (including augmentation) shall have a pure electric continuous driving range of not less than 50 km (constant speed method). Interpretation: The pure electric bus subsidy index fell quickly, the overall subsidy reduced by 50%-55%, and the subsidy per kilowatt-hour reduced more. However, the New Deal abolishes the threshold requirement that the total mass of the battery system of the new energy bus should not be higher than 20% of the total mass of the whole vehicle (m/m). Change 5: Special Purpose Vehicle Subsidy Introduced Load Standard Light Truck Relatively Advantageous This new energy special purpose vehicle's single vehicle subsidy upper limit introduced the special purpose vehicle's load category, respectively is N1, N2, N3. According to the respective standards, Class N1 refers to trucks with a maximum design gross mass not exceeding 3,500 kg, mainly micro-passenger and micro-truck models, which are relatively low-tech. There are more non-main automobile enterprises; Category N2 refers to trucks with a maximum total designed mass of more than 3500 kg but not more than 12000 kg, mainly light trucks and other urban logistics vehicles, with relatively strong technology; Category N3 refers to trucks with a maximum design gross mass exceeding 12,000 kg, which are mainly medium-weight trucks, such as diesel trucks transported in cities. Interpretation: The decline in subsidies for new energy vehicles has a certain rational cooling effect on the development of logistics vehicles for enterprises, especially in 2018 on the basis of a 40% decline, the decline is still 46% to 59%. From the New Deal to these types of vehicle subsidy classification, the N1 type of micro-passenger vehicles hit by the larger, the upper limit of subsidy is only 20,000 yuan; N2 light trucks and light passenger trucks enjoy a subsidy ceiling of RMB 55,000 yuan just like N3 medium and heavy trucks, which is conducive to the strong performance of the main light truck enterprises, and also indicates the government's encouragement to the electrification of medium and heavy truck models. Change 6: Subsidy for infrastructure such as charging/hydrogenation instead of compensation for withdrawal "Local policies should be improved so that after the transition period, new energy vehicles (except for new energy buses and fuel cell vehicles) are no longer subsidized for purchase, but are instead used to support the" short-board "construction of charging (hydrogenation) infrastructure and ancillary operational services, among others. If local subsidies continue to be granted, the central government will make corresponding deductions for the relevant financial subsidies. "Interpretation: The formulation of this policy is to force local governments to liberalize the protection policy on the one hand, and to deal with the huge gap in charging infrastructure on the other hand. According to the" Guidelines for the Development of Electric Vehicle Charging Infrastructure "jointly issued by the four ministries (2015 -2020) "By 2020, more than 12,000 centralized charging and exchanging stations and 4.8 million decentralized charging piles will be added to meet the charging demand of 5 million electric vehicles nationwide. However, as of November 2018, there were 728,000 charging piles nationwide, representing a completion rate of only 15 per cent and a shortfall of 4.072 million. Analysts at the GAI believe that the removal of land subsidies will raise prices for companies that have previously relied too heavily on subsidies in some markets. It is reported that Weilai, Xiaopeng and Mustang and other enterprises have begun to act, will gradually adjust the model prices. However, other car companies, such as GAC New Energy and BYD, have said they will keep prices unchanged. Change 7: Pre-allocate part of funds to relieve pressure on enterprise funds "Starting from 2019, vehicles with operating mileage requirements will be pre-allocated part of the funds upon completion of sales licensing, and liquidation can be applied for according to procedures after mileage requirements are met. Vehicles with operating mileage requirements that are sold after the issuance of the policy will not be subsidized if they do not meet 20,000 km of operating mileage within two years from the date of registration, and the advance funds will be deducted at the time of liquidation. " Interpretation: The current policy, operating vehicles to apply for subsidy liquidation needs to meet the 20,000 km mileage. Some enterprises reflect that liquidation time is long and capital occupancy pressure is high. The New Deal will improve the liquidation system and increase capital efficiency, which can alleviate the pressure of enterprise capital to a certain extent, and let enterprises design good products to promote, market promotion, capital matching, etc. to achieve sustainable development. Change 8: Vehicles that do not meet the subsidy requirements are included in the Recommended Catalogue "From 2019 onwards, vehicles that meet the requirements of the Announcement but Vehicle models that do not meet the 2019 subsidy specifications are also included in the recommended vehicle catalogue. " Unscramble: All the time, The local government has no restrictions on travel, Non-subsidy measures such as purchase exemption and licensing facilities have played an important role in expanding the consumption of new energy vehicles, and some places have linked the above measures with the recommended model catalogues. Therefore, in order to encourage the consumption of new energy vehicles and strengthen the role of non-subsidy policies, the New Deal has included the models meeting the requirements of product announcements in the recommended model catalogues. Change 9: Shorter Transition Period and Reduction in Standards "The New Deal was implemented from 26 March 2019 and the transition period was from 26 March 2019 to 25 June 2019." During the transition period, sales of licensed vehicles that meet the requirements of the 2018 Technical Indicators but do not meet the requirements of the 2019 Technical Indicators will be subsidized by 0.1 times the corresponding standard under the 2018 Subsidy Policy; Sales of licensed vehicles that meet the requirements of the 2019 Technical Indicators will be subsidized by 0.6 times the 2018 equivalent standard; Sales of licensed fuel cell vehicles during the transition period are subsidized at 0.8 times the 2018 equivalent standard. Considering the cycle of technological transformation and upgrading of new energy vehicles, it takes some time to digest the inventory products. In order to avoid a big impact on the production and marketing of enterprises, the New Deal continues to set up a policy transition period. However, compared to 2018, the transition subsidy rates have been lowered and the transition period has been shortened from four months to three months. Summary: Overall, the 2019 New Deal of Subsidy will increase the downhill effort on the basis of 2018, with an average of 50% downhill for the three major models until the end of 2020 Forward retreat into place, while the New Deal also eliminated land subsidies and replaced them with subsidies for infrastructure such as charging/hydrogenation. It is conceivable that with the sharp decline of state subsidies and the cancellation of land subsidies, the era of living by financial subsidies will be gone forever, and the new energy automobile industry will enter the stage of market competition of real knives and guns.