How do power battery companies embrace the “post-subsidy era”?

At the China Electric Vehicle Hundred Peoples Forum (2017), participants discussed the subsidy policy and said that the future subsidy orientation will shift towards marketization and dynamics, and enterprises with backward technology will not be subsidized. What really stands in the big waves is the power battery companies with outstanding innovation ability, core technology and brand effect.

On January 1, 2017, the new subsidy policy for the promotion and application of new energy vehicles was officially implemented, and the industry and the market ended their waiting, ushered in a new phase of change.

动力电池企业如何拥抱“后补贴时代”

Systematic interpretation of the "post-subsidy era" to find the crux of development

Continuous breakthroughs in technology, follow-up of supporting facilities, and incentives for preferential policies... In the past year, China’s new energy automobile industry has made great strides. However, behind the situation, many problems have gradually emerged.

On the one hand, it is the positive effect of super high growth in production and sales, on the other hand, the problem of “cheat compensation” seriously affects industrial development, structural overcapacity of low-end production capacity, and increased safety accidents, especially “cheat up incidents” to new energy vehicles. Development has cast a shadow.

From 2013 to 2015, the central government allocated a total of 28.444 billion yuan in subsidies for new energy vehicles and incentive funds. In 2016, the Ministry of Finance conducted a special inspection of 90 major new energy vehicle manufacturers, exposing 5 typical cases, involving 3,547 vehicles with problems, involving more than 1 billion yuan of central financial subsidies.

The Minister of the Ministry of Industry and Information Technology, Miao Wei, pointed out at the forum that the new energy automobile industry is still in the primary stage of development, "going against the water, not going back." Although the scale of the production and sales market has grown rapidly, the core technology of power batteries needs to be greatly improved. The problem of insufficient high-end capacity of power batteries and low-end overcapacity is further aggravated. There have also been problems such as individual companies seeking to cheat in violation of regulations and disrupting market development order.

Song Qiuling, deputy director of the Economic Department of the Ministry of Finance, believes that some enterprises are over-reliant on subsidy policies, and the motivation for price reduction is insufficient. In addition, low-end overcapacity, high-end production capacity is seriously insufficient, and advantageous enterprises and fist products are few, which lacks overall competitiveness in the international arena.

According to Wang Zidong, director of the National 863 Electric Vehicle Major Power Battery Test Center, the total capacity of the power battery companies is over 170Gwh/year, and the production capacity is more than 7 times of the demand.

In fact, the new energy automobile industry has always faced the problems of lack of core technology of power battery and insufficient construction of charging facilities. Although it has been greatly improved, it has not been fundamentally solved. Nowadays, new problems such as imperfect access and regulatory systems, subsidized car companies and mixed products have begun to emerge.

Participants generally agreed that, in line with the “subsidy era”, the “post-subsidy era” of new energy vehicles is characterized by subsidies falling, thresholds for improvement, inclusive policies shifting to the survival of the fittest, and financial subsidies to market-based incentives.

Policy-driven gradual weakening

"Government subsidy policy has entered the retreat channel, and the process of improving the cost performance of electric vehicles can keep up with the process of policy retreat, and gradually embark on the road of self-development based on the market, which has become the key to the success of the industry. Chen Qingtai, chairman of the China Electric Vehicle 100-member Association, throws this view.

In 2016, the superposition effect of various national policies fully reflected that electric vehicles showed explosive growth. The output of new energy vehicles accounted for more than 1.8% of total vehicle production in the whole year, indicating that the national encouragement and support policies have been perfected and received positive response from most pilot cities. But overall, this is still a policy-driven market, and its unsustainability has begun to emerge.

Participants believe that the decline in car subsidies is a transition from government support policies to promoting innovation. While purchasing cars and subsidies are gradually decreasing, the government should increase support in research and development, and concentrate resources to support technological bottlenecks in power batteries, core components, electronic control technology, lightweight, and intelligent.

Xu Heyi, chairman of the Beijing Automotive Group, analyzed that from the transition to support subsidies to regulatory guidance, policy-driven weakening, innovation drive is highlighted. Since 2016, the role of the government has been significantly adjusted, and industrial policies have shown four major trends.

First, through the "New Energy Vehicle Integration Synchronization Management Measures" and "Carbon Quota Management Measures", the whole vehicle enterprises are forced to accelerate the transition from traditional fuel vehicles to new energy vehicles. Second, the standards for access, sales and use. Released to raise the threshold of the industry; thirdly, through the subsidy of subsidies and the breakdown of private charging piles, gradually reduce the government's intervention in the protection of new energy industry; Fourth, through the release of battery catalogs and technology roadmaps, guide enterprises to focus on supply Chain construction and accumulation of core technologies.

All parties have adopted a multi-pronged approach to smoothly pass the “post-subsidy era”

In the “post-subsidy era”, Miao Wei suggested that it is necessary to strengthen the construction of the standard system according to the development of the industry, timely adjust and improve relevant policies and measures, carry out special inspections for new energy vehicles, and make a transition for subsidies and exits in 2020, on the battery management system. Strengthen R&D investment in other areas.

“The Ministry of Finance will increase supervision and clarify accountability. The stability and sustainability of subsidy policies are important for the development of the industry, and subsidy policies do not interfere with the technical route.” Song Qiuling emphasized that power battery companies should focus on technological innovation. On the other hand, companies with backward technology will not receive financial subsidies.

The core competitiveness of an enterprise includes core technologies and brands. Core technologies are important, but brands are more important. Chen Qingtai said that there must be quality and technical support behind the brand. Don't be misled by market explosive growth. Some companies focus all of their effective resources on capacity expansion, relaxing or ignoring innovation and R&D. We should cherish and use the cycle of retreating and concentrate on building core competitiveness.

Ouyang Minggao, executive vice president of China Electric Vehicles 100, also suggested that from the policy point of view, with the gradual decline of subsidies, the new energy points system will be implemented in the future; from a technical perspective, the future will be open to commercial competitiveness.

The core of the competitiveness of electric vehicles is to gather outstanding talents, have strong research and development capabilities, master key technologies and establish good brand effects. For the automotive industry, the expansion of production capacity is relatively easy, and the formation of core competitiveness is very difficult, it will take time.

Innovation should be the core driving force. Xu Heyi pointed out that industrial development should be focused on "focusing on technology, focusing on products, focusing on resources, and focusing on the market." With a heart-to-heart "focus strategy" to build core competitiveness.

The subsidy policy will fall back to form a positive positive energy, and the subsidy orientation will give way to market orientation and give way to innovation orientation. The role of survival of the fittest will be strengthened. In the big waves, the real battery companies are innovative, capable core technology and outstanding brand effect.

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