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NEV industry to be driven with more market forces

The government reaffirmed its strong support for the NEV industry. Three ministries including the Ministry of Industry and Information Technology (MIIT) jointly released their mid- and long-term plan for the auto industry on April 25.

In a 10 year period to propel the nation into an automotive powerhouse, China will choose NEVs and intelligent connected vehicles as breakthrough points and target annual NEV output and sales of 2 million units by 2020. 

After a robust growth last several years, the NEV market has cooled down so far this year.

According to data from China Association of Automobile Manufacturers (CAAM), China produced 58,317 and sold 55,929 NEVs respectively in the first quarter of this year, down by 7.7 and 4.7 percent respectively.

With the ending of strict subsidy fraud investigation and gradual phase out of financial subsidies, the industry is beginning to be driven by market forces and finding a new way out.

Several recent deals signaled such change.

China Hi-Tech Group Corp. (CHTGC), a state-owned company which features textile machinery business and eager to expand its infant auto business, inked a ¥3.8 billion ($552.33 million) worth of order with OptimumNano Innovation Alliance on March 7. The two will jointly develop electric logistics vehicles and promote 20,000 new energy commercial vehicles by yearend.

The cooperation between CHTGC and OptimumNano can make full use of each other’s industry advantages. Initiated by OptimumNano, a high tech power battery company, the OptimumNano Innovation Alliance covers the whole NEV industry chain and NEV related operating platforms, financial services, R&D bodies and promote electrification on public transport, logistics and charging service systems. CHTGC also released its low carbon transportation solution. The two aim to build a new energy logistics vehicle business eco-circle.

Later in the month, initiated by BAIC Capital, BAIC Group’s investment body, the ¥10 billion An Peng New Energy Vehicle Industry Development Fund was launched. This means auto OEMs have joined hands with social capitals. The fund will eye on forefront technologies, nurture innovative industries and address industry headaches such as lack of charging infrastructure.

Integration of traditional auto OEMs with internet companies is on and accelerating.

On April 9, Chang’an and EV startup company NIO (NextEV) reached an agreement to jointly promote NEV smart services. The former has acquired some 60 smart technologies including smart driving and V2X and the latter has established design, R&D and manufacturing bodies in 12 regions globally.

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