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　　Zhang Yongwei, vice chairman and secretary-general of the China Electric Vehicles Association, was invited to participate in the 3rd International Seminar on Leaping the Oil Era organized by the Energy Research Institute of Peking University, and released the theme report "Development Trends and Policy Prospects of New Energy Vehicle Industry". In the report, Zhang Yongwei focused on sorting out 10 important development trends worthy of the new energy vehicle industry's attention in the next three to five years, and gave corresponding policy recommendations on the basis.

　　10 key trends in the development of the new energy automobile industry in the next 3-5 years

　　1. The global development of new energy vehicles has entered an irreversible fast lane

　　The only direction of global automobile development is new energy, or electrification, which has become the consensus of all countries and enterprises around the world. In the past, many countries have disputes and sway on this point, but China's new energy automobile industry has been growing and constantly reaching new levels. After several years of development, the irreversible trend of new energy has basically taken shape.

　　At present, China's new energy vehicle penetration rate has exceeded 10%, that is, the proportion of electrification in the increase of vehicles is more than 10%, and it is expected to exceed 30% by 2025. The penetration rate of the United States, Europe and other countries is also increasing, especially in Northern Europe, where the proportion of new car sales of electric vehicles in Norway has been close to 100%. Of course, the technical routes of electrification in various countries are different. China is dominated by pure electricity, Europe is dominated by plug-in electricity, and Japan is dominated by weak hybrids.

　　2. China will still be the leader for a long time

　　Based on the research and prediction of the Hundred Talents Association, the annual sales of electric vehicles in China will exceed 5 million in 2022 and will reach at least 7 million in 2025, an optimistic estimate of 9-10 million. From 1 million vehicles to 10 million vehicles, in just a few years, this development speed has created the "highest" in the global new energy industry. The number of new energy vehicles, the growth rate, and the scale of the industry driven by them were unimaginable in the past. Take power batteries as an example. By 2025, China's battery installed capacity will reach 600GWh, the world's largest.

　　3. Small and medium cities and rural areas will become new market growth points for new energy vehicles

　　In the past, small and medium-sized cities and rural consumers often chose fuel vehicles for their first cars. Entering the stage of rapid development of motorization, consumers' first car will most likely be a new energy vehicle. This will become a flashpoint in China's electrification market after large cities in the next 3-5 years, and it will become one of the most important areas in the future market growth. This will play a huge role in reducing carbon emissions and improving motorized travel in third- and fourth-tier cities and rural areas.

　　4. China's electric vehicles have truly entered the stage of market-oriented competition

　　2021 is a watershed for China's electric vehicle industry. From the perspective of market competition, all financial subsidies will be withdrawn in 2022, and all auto companies will be at the same starting line. The competition among auto companies is bound to become more intense. After the subsidy is withdrawn, new models on the market will also emerge, especially foreign brands. From 2022 to 2025, China's new energy vehicle market will enter a stage where a large number of new models and brands emerge.

　　Different from the characteristics of the development of the new energy vehicle market in the past decade, market competition will enter a stage of real big waves. In the past, production capacity and brands that were uncompetitive and grew up with subsidies will face great challenges at this stage. Some production capacities will accelerate their withdrawal and some brands will disappear.

　　5. The electrification and intelligence of automobiles are officially merged into one

　　In the past ten years, the theme of the automotive industry's transformation has been electrification. In the next stage, the theme of change will be intelligent based on electrification. The popularization of electrification is driven by intelligence. Pure electric vehicles will not become a selling point in the market. Only smarter vehicles will be the focus of market competition. On the other hand, only electric vehicles can embed intelligent technology more completely, and the best carrier of intelligent technology is an electrified platform. Therefore, on the basis of electrification, intelligentization will be accelerated, and the "two industrializations" will formally merge in the car.

　　6. The energy revolution and the automobile revolution achieve substantial synergy

　　With the implementation of "dual carbon", energy-side changes will make electric vehicles greener and use real renewable energy. At the same time, new energy vehicles can be connected to the grid to achieve vehicle-network interaction. The ideal model of wind power, photovoltaics, energy storage, electric vehicles and smart grids will be realized in advance. In the next 3-5 years, technologies and policies will further support the greening of electric vehicles. From small-scale pilot projects to the track of large-scale development, the energy revolution and the automobile revolution will truly achieve substantial synergy.

　　7. The supply chain has become the bottleneck and important competitiveness of the development of auto companies

　　Low-carbonization is the first huge challenge facing the automotive supply chain. Under the vision of global carbon neutrality, almost all vehicle companies and component industries are highly concerned about and relying on the reform of the supply chain. How to achieve green, low-carbon or net zero emissions in the supply chain is a problem that companies must solve. The timetable for carbon neutrality of large auto companies is between 2035 or 2040, which is only 10-20 years ago. By then, net zero emissions in the entire industry chain will be achieved. This means that not only the entire vehicle manufacturing process, but also the production and manufacturing of upstream parts and components to logistics transportation must achieve net zero emissions.

　　Intelligence is the second challenge facing the automotive supply chain, especially chips. In 2021, the global automotive industry will reduce production by about 10 million vehicles due to a shortage of chip supply, and China will reduce production by an average of 20%.

　　The supply chain is a key threshold for the future development of electric vehicles and smart vehicles. This supply chain is globalized. In addition to being affected by its own strategy, companies are also affected by external factors such as the international community. In particular, the epidemic, major country trade disputes, technological competition, shipping, etc., will all affect the changes in the supply chain of the automotive industry.

　　8. The pace of technological innovation of new energy vehicles will be significantly accelerated, and the curtain of full-stack electrification of automotive products will be opened.

　　The outbreak of the market will stimulate a new wave of automotive technology innovation. In the past, the main problem that plagued the marketization of new energy vehicles was cost. After the subsidy is withdrawn in 2022, technology will become the core factor in the competition between new energy vehicles and gasoline vehicles. Technological progress has enabled new energy vehicles to basically have the economic advantage of competing with fuel vehicles of the same level, and truly usher in the turning point expected by the industry.

　　Due to economic advantages, the development of high-end brand electrification is very fast, and NIO has entered the BMW and Mercedes-Benz markets at the same price. In the A0-level market, especially the electric vehicle market below 50,000 yuan, its price/performance ratio also exceeds that of fuel vehicles. Thanks to advances in technology, especially battery technology, the advantages of electrification at both ends of the "cheapest car" and "most expensive car" have become very obvious. In the next few years, the focus of industry competition will be concentrated on the "middle" market of around 200,000 yuan, and new advantages will be gradually formed.

　　9. Electrification drives rapid innovation in business models

　　After the electrification of automobiles enters the real marketization stage, it will drive a large number of rapid innovations in business models. For example, the integration mode of optical storage and charging, battery exchange mode, battery bank mode, etc.

　　10. The supporting infrastructure is gradually complemented and a new business model of triple play will be derived

　　The only infrastructure in the era of fuel vehicles is gas stations and gas stations. Due to the development of electrification of automobiles, major changes will occur to the energy infrastructure in the future. Charging, battery replacement, fast charging, slow charging, mobile recharging of batteries, hydrogen refueling, etc., will form an integrated infrastructure. This will be a major highlight of the future development of electrification, and it is also a hot spot for industry investment.

　　Six suggestions for future industrial development

　　1. The subsidy retreat must be stable and predictable. In the stage of rapid development of automobile electrification, policies should maintain appropriate stability and predictability. The subsidy decline in 2022 is necessary, but it is best not to make frequent adjustments. It is the common expectation of many parties to withdraw by the end of the year instead of withdrawing early in the middle of the year.

　　2. After the subsidy declines, it can be supported by double points. Double points is the most important policy for boosting the electrification of automobiles after subsidies have declined. Continuing to optimize the double points policy has a huge impact on the industry. The focus of optimization in 2022 is to further increase the ratio and allow point trading. At the same time, the scope should be expanded to include trucks and commercial vehicles in addition to passenger cars.

　　3. Include cars in carbon trading. Allowing carbon policies to restrict the auto industry can also encourage vehicles to become renewable and green.

　　4. Provide support on the user side. After the car purchase subsidy is withdrawn, support can be given in terms of car use. Especially in the field of new energy vehicle infrastructure construction and charging and swapping, subsidies are provided to builders and users to make the use cost lower.

　　5. Develop non-monetary policies. Including non-monetary policy support for new energy vehicles in some cities, such as unlimited purchases, unlimited driving, the implementation of dedicated lanes, and priority parking.

　　6. Encourage and support leading cities and enterprises. Including encouraging the first provinces and cities to fully promote electrification, encouraging pioneering companies to take the lead in achieving zero carbon, and encouraging pioneering factories to achieve net emissions or a zero-carbon supply chain.