The leapfrog development of China's new energy vehicles

From 1992 to 2022, China's new energy vehicle development has gone through 30 years, from zero to one, from small to large, and from weak to strong. On the road to success, there are inventions and scientific research by engineering and technical personnel, the adventurous spirit and strong sense of professionalism of entrepreneurs, the policy support of the government and the continuous optimization of the market environment, and the social responsibility of consumers' increasing environmental awareness.

Analysis of the development history of new energy vehicles in my country

The development history of new energy vehicles in my country can be divided into four stages.

The first stage (1992-2006): Exploration based on scientific research projects to achieve industrial cultivation of new energy vehicles

In the early 1990s, my country focused on exploring a leapfrog development path to get rid of fuel vehicle technology, reduce environmental pollution, and achieve a world automobile power. From Academician Qian Xuesen's suggestion in 1992 to Comrade Wan Gang, who worked at Audi in Germany, proposing to the State Council the development of clean energy cars in 2000, the government actively supported it, and my country's scientific and technological circles, industrial circles and the government interacted and communicated, formed a development consensus, and jointly promoted the automobile industry into the fast lane of development. During the "Eighth Five-Year Plan", the State Planning Commission arranged the "Electric Vehicle Key Technology Research" project in the national key science and technology research plan, invested 15 million yuan, and pioneered the electric vehicle research and development project. During the "Ninth Five-Year Plan", the Ministry of Science and Technology carried out the "Electric Vehicle Major Science and Technology Industry Engineering Project", completed the design of the electric sedan concept car, the trial production of the electric modified car, and carried out trial operation. The prototype car achieved a speed of 110 kilometers per hour, a driving range of 130 kilometers, and an acceleration of 8.5 seconds, reaching the advanced level of similar modified cars abroad.

During the "15th Five-Year Plan", the state implemented the "Major Science and Technology Project for Electric Vehicles" (863 Plan), forming the overall technical route of my country's new energy, namely the "three verticals and three horizontals" ("three verticals" are fuel cell vehicles, hybrid vehicles, and pure electric vehicles, and "three horizontals" are multi-energy powertrain systems, drive motors, and power batteries) research and development layout, and successively developed electric vehicle functional prototypes, performance prototypes, and product prototypes. In terms of vehicle technology development, hybrid vehicle performance prototypes can save more than 30% of fuel and reduce emissions by 30%. In terms of key component research and development, breakthroughs have been made in the key technology of preparing high-power hydrogen fuel cell engine groups, and the performance indicators of high-power nickel-hydrogen and lithium-ion power batteries such as power density have approached the international advanced level. During the "11th Five-Year Plan", through the "863 Plan Energy-Saving and New Energy Vehicle Project", a large number of research projects were carried out with vehicle integration as the carrier and power system as the core to break through the bottleneck technology of key components of energy-saving and new energy vehicles, and a preliminary technical innovation system for electric vehicles was established. 15 national key laboratories and engineering technology research centers were built, 48 electric vehicle R&D platforms were formed, and more than 350 types of new energy vehicles were announced in the catalog.

During large-scale events such as the 2008 Beijing Olympic Games, new energy vehicles successfully carried out centralized, high-intensity, and large-scale electric vehicle demonstration operations, initially formed a production capacity of 150,000 electric vehicle complete vehicles and key components, successfully cultivated the strategic emerging industry of electric vehicles, and provided new opportunities for my country's automobile industry to achieve industrial upgrading. During this period, Comrade Wan Gang made important contributions to the development of my country's new energy vehicle industry and was an important leader and promoter of my country's new energy vehicle industry from scratch to growth and development.

The second stage (2007-2017): Demonstration operation, the industry entered the introduction period

Industry support policies have effectively promoted the rapid development of new energy vehicles. In 2007, my country issued the "New Energy Vehicle Production Access Management Rules", which kicked off the standardized management of the industry. In 2009, the "Automotive Industry Adjustment and Revitalization Plan" was issued, which for the first time proposed the development goal of forming a production capacity of 500,000 new energy vehicles and new energy vehicle sales accounting for about 5% of the total passenger car sales. In 2012, the "Energy-saving and New Energy Vehicle Industry Development Plan (2012-2020)" was issued, which established a technical route based on pure electric drive, and proposed that by 2020, the cumulative production and sales of new energy vehicles will exceed 5 million, and the technology of new energy vehicles, power batteries and key components will reach the international advanced level as a whole, forming a group of new energy vehicle companies with strong competitiveness.

The demonstration operation has achieved remarkable results. From 2009 to 2012, a small-scale demonstration promotion and application mainly in the public sector was carried out. By the end of 2012, a total of 27,000 new energy vehicles had been promoted, of which 23,000 were promoted in the public sector. From 2013 to 2017, China entered a period of large-scale demonstration, promotion and application. In 2015, the number of demonstration cities increased to 88, and the sales of new energy vehicles exceeded 330,000, accounting for nearly 60% of the global sales of new energy vehicles, indicating that China has become the world's largest new energy vehicle market. The number of new energy passenger vehicle products increased to 58, and the speed of technological iteration was significantly accelerated. For example, the battery cost of the BAIC EU400, which has a range of 400 kilometers, has dropped to 1,900 yuan/kWh.

Enterprises in the industrial chain are booming. There have been breakthrough developments in the whole vehicle. BYD Auto successfully developed the first pure electric sedan F3e in 2006, and the first plug-in hybrid sedan F3DM was launched in 2008. Since then, it has opened up the dual technical routes of pure electric and plug-in hybrid, and gradually formed two major product series, "Dynasty" and "Ocean"; successively released industry-leading blade batteries and super hybrid DMi technologies. In 2022, BYD topped the world with 1.868 million new energy vehicle sales, and became the world's third largest automaker by market value at the end of the same year. In 2009, BAIC Group established BAIC New Energy Company, becoming the first new energy vehicle joint-stock company and the first new energy vehicle listed company in China, and ranked first in my country's pure electric vehicle sales for seven consecutive years from 2013 to 2019. From 2014 to 2016, Internet company leaders represented by Li Bin, Li Xiang, and He Xiaopeng joined the car-making army. Traditional companies such as BAIC and SAIC also began to plan pure electric brands. Foreign brands represented by Volkswagen successively released new energy vehicle launch plans.

The charging service market is rapidly emerging. Parts companies such as "Jingjin Electric", which was established in 2007, have grown into leading companies in the electric drive field. CATL, established in 2011, mainly focuses on lithium iron phosphate and ternary lithium batteries, and has successively developed CTP module-free batteries, sodium-ion batteries, and CTP 3.0 Kirin batteries, and has laid out solid-state battery research and development. Since 2017, it has maintained the world's first installed capacity of power batteries for six consecutive years. The charging service market is also rapidly developing. Companies such as State Grid and Teld have begun to deploy charging equipment manufacturers and upstream supporting fields. A charging industry chain led by charging piles is taking shape.

The third stage (2017-2020): Market-oriented development and opening up, the industry enters a period of rapid growth

The "Measures for the Parallel Management of Passenger Vehicle Enterprises' Average Fuel Consumption and New Energy Vehicle Credits", "Special Management Measures for Foreign Investment Access (Negative List) (2018 Edition)" Joint Venture Policy and "New Energy Vehicle Industry Development Plan (2021-2035)" and other policies have been successively introduced, and the new energy vehicle industry has accelerated its transformation to market-driven, the industry has intensified its opening up to the outside world, and the industry competition pattern has gradually taken shape.

The production and sales targets have been basically achieved. In 2018, my country's new energy vehicle sales exceeded 1 million for the first time. By the end of 2020, my country's new energy vehicle ownership exceeded 4.92 million, close to the original planning target of 5 million. By the end of 2020, the proportion of private consumption increased to 71%, and the market gradually penetrated into non-restricted areas. In 2020, the sales share of non-restricted cities increased to 62%, and the market-driven characteristics became more obvious.

High-end development of independent brands. With intelligence as an advantage, the new development cluster of car manufacturing drives the high-end development of independent brands. New car products are characterized by intelligence, and their product design, technology configuration, user service and operation are unique. In December 2017, NIO launched its first mass-produced model ES8, and delivered more than 40,000 new cars in 2020, making it the first independent company to achieve a breakthrough in the luxury car field; in October 2018, Ideal Auto released its first model Ideal ONE, with annual sales exceeding 30,000 in 2020, thus driving the development of extended-range hybrid vehicles in my country. New products are characterized by intelligence, and their technological attributes are very obvious. Their product design, technology configuration, user service and operation are unique, and they have become the representative of my country's automobile industry's impact on the high-end market.

Tesla's localization promotes industry acceleration. In July 2018, Tesla signed an investment and factory construction agreement with the Shanghai Municipal Government. Construction began in January 2019, and the domestically produced Model 3 was delivered in January 2020. Sales in that year reached nearly 150,000 units, ushering in a stage of rapid development.

The industry competition pattern has formed a new camp. By the end of 2020, my country's new energy vehicle market has gradually formed a competition pattern dominated by four major camps: traditional independent, new car clusters, joint ventures and luxury brands. Traditional independent brands represented by SAIC-GM-Wuling, BYD, and GAC Aion are making efforts at both ends. The cumulative sales of SAIC-GM-Wuling MINI EV have exceeded 1.1 million units; GAC Aion's sales increased to 270,000 units in 2022; new leading car manufacturers have performed strongly, and tail companies have accelerated their exit; the electrification layout of joint venture brands has accelerated across the board, and Volkswagen has become the leader in the electrification strategy of joint venture brands; Tesla is leading traditional luxury brands, and traditional luxury brands are catching up and accelerating the transformation process.

The fourth stage (2021 to present): The "dual carbon strategy" promotes the rapid development of the new energy vehicle industry, and the industry enters the popularization period

New energy vehicles have grown explosively. Under the guidance of the "dual carbon strategy", my country's new energy vehicles have achieved explosive growth since 2021, with sales reaching 3.521 million and 6.887 million respectively, and penetration rates reaching 13.4% and 25.6%. New energy vehicles have entered the popularization period. In 2022, sales of domestically produced new energy passenger vehicles will account for 79.9%, with BYD surpassing Tesla to become the global champion in new energy vehicle sales. New domestically produced brands such as NIO, Ideal, and Xpeng will deliver more than 100,000 vehicles that year, significantly improving the competitiveness of domestically produced brands.

The "dual carbon" goal has driven the leapfrog development of new energy for commercial vehicles. Benefiting from the demonstration operation policy in the public sector, the electrification process of commercial vehicles in my country has been significantly accelerated. Since 2015, sales have been rising year by year, reaching 307,000 units in 2022, a year-on-year increase of 65%, and the penetration rate reached 9.4%, a year-on-year increase of 5.5%. New energy commercial vehicles are mainly pure electric models, and the sales volume of pure electric models reached 97.8% in 2022. As a leading enterprise in my country's commercial vehicles, BAIC Foton has continued to invest in the field of new energy and has formed a complete industrial chain covering vehicle research and development, manufacturing, fuel supply and other links. The key components and core technologies are basically self-controlled. At the same time, it is also the vanguard in my country's hydrogen fuel cell vehicle field. At the 2022 Beijing Winter Olympics and Winter Paralympics, BAIC Foton provided 515 hydrogen fuel buses, contributing to the green Olympics. Yutong Bus is also at the forefront of the industry in terms of new energy buses.

Internationalization is rapidly expanding, and the industry has started global competition. At the beginning of 2021, BYD, Weilai and other companies formed groups to go overseas; CATL, Guoxuan High-tech, Honeycomb Energy and other companies also built production bases in North America and other places. CATL's first overseas factory has achieved mass production of lithium-ion battery cells, and the industry has gone abroad to participate in global competition. In 2022, my country accounted for 3 of the top 10 companies in the world in terms of new energy vehicle sales, and 6 of the top 10 companies in terms of power battery installed capacity. In 2022, my country exported 679,000 new energy vehicles, a year-on-year increase of 1.2 times.

Experiences in the development of my country's new energy vehicle industry

In 2014, General Secretary Xi Jinping proposed during his inspection of SAIC Group that "the development of new energy vehicles is the only way for my country to move from an automobile power to an automobile power", which pointed out the direction for the development of new energy vehicles in my country. After 30 years of development, my country has cultivated the world's largest electric vehicle manufacturing and consumption market, and the new energy vehicle industry has many highlights.

Improve top-level design, industry planning and policies to provide strong guarantees for leading industry development

In 2007, my country selected new energy vehicles as a national strategy to revitalize the automobile industry, and listed it as a national strategic emerging industry. An industrial plan was formulated and continuously updated. In the early stage, the industrialization of new energy vehicles was driven by gradually expanding the scope of demonstration operations and supporting corresponding subsidy policies; as the market formed a certain scale, the policy, regulations and standards system was gradually improved, which effectively promoted the rapid transition of the new energy vehicle industry from policy-driven to market-driven. From 2009 to the end of 2022, the central and local governments continued to subsidize the promotion and application of new energy vehicles, accelerating the process of industrial transformation. According to statistics from the Economic Observer, by the end of 2022, the amount of central government subsidies alone will be as high as 166.8 billion yuan (excluding the amount of subsidies that have been sold in 2022 and before but have not been cleared), as well as a huge amount of local subsidy funds. my country has provided the world's largest-scale fiscal subsidy funds, which has effectively promoted the development of new energy vehicles, a strategic emerging industry, and laid the foundation for the industrialization of new energy vehicles in my country.