Parts shortage disrupts production rhythm, new energy vehicle industry chain needs urgent repair

Due to the combined impact of the epidemic and other factors, the production and sales volume of domestic new energy vehicles fell sharply month-on-month in April, suddenly stalling.

Recently, a reporter from Shanghai Securities News conducted research on the domestic new energy vehicle industry chain in Shanghai, Shijiazhuang, Lanzhou, Zhengzhou and other places.

Through field visits or telephone interviews, it was found that the once hot Chinese new energy vehicle market is experiencing a "late spring cold snap". All participants in the industry chain, including new energy vehicle manufacturers and parts manufacturers, are experiencing difficulties in production and delivery.

Industry insiders pointed out that new energy vehicles have a very long industrial chain, and problems in any link will affect the whole. All parties need to do their best to provide relief and repair the breakpoints as soon as possible.

Vehicle side: Production capacity drops sharply

"I have been at home for two months, and I have been paying attention to the epidemic prevention and control situation in the community every day." Mr. Zhang, who lives in Yangpu District, Shanghai, told reporters that he is a front-line worker in SAIC-GM's new energy vehicle workshop. Since the end of March 2022, he has been waiting at home to return to work.

As the largest state-owned automaker in China in terms of new energy vehicle production and sales, SAIC Motor produced 158,100 vehicles in April, down 62.02% from 416,400 vehicles in the same period last year, and sold 166,600 vehicles in April, down 60.30% from 419,500 vehicles in the same period last year. SAIC-GM, where Mr. Zhang works, saw a 70% year-on-year drop in production and sales.

"The epidemic since March has increased the uncertainty of production and sales," a relevant person in charge of SAIC Group told reporters.

The situation in China is not optimistic. According to the production and sales data released by the China Association of Automobile Manufacturers, in April, my country's automobile production and sales were 1.205 million and 1.181 million respectively, down 46.2% and 47.1% month-on-month, and down 46.1% and 47.6% year-on-year, with the production and sales volume reaching a new monthly low in the past 10 years. The originally hot new energy vehicle market was also deeply affected. The domestic production and sales volume of new energy vehicles in April were 312,000 and 299,000 respectively, down 33% and 38.3% month-on-month.

"Since April, the domestic epidemic has generally shown a trend of multiple outbreaks. The automotive industry chain and supply chain have experienced the most severe test in history. Some companies have stopped production, logistics and transportation have been greatly hindered, and production and supply capacity have dropped sharply," said Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers. It is estimated that in April, domestic vehicle production decreased by about 1 million vehicles.

According to the production and sales data of mainstream new energy vehicle companies, the number of new energy passenger vehicle manufacturers with wholesale sales exceeding 10,000 vehicles in April dropped from nearly 10 to 4, including BYD with 105,500 vehicles, SAIC-GM-Wuling with 30,000 vehicles, Chery Automobile with 15,600 vehicles, and GAC Aion with 10,200 vehicles. In April, Tesla China produced 10,800 vehicles, with wholesale sales of only 1,512 vehicles.

Spare parts: Out of stock has affected delivery

“从3月17号以后，我就没离开过家所在小区一步。”总部位于上海的新能源汽车公司威马汽车董事长沈晖透露。相对于上海总部，沈晖目前更担心的是威马汽车位于湖北黄冈和浙江温州的整车生产工厂，虽然目前湖北和浙江两地都没有发生疫情，但是威马工厂的产量还是下降了，原因是零部件缺货。

沈晖介绍，以上海为中心的长三角区域是中国汽车产业重镇，这一地区在新能源车零部件生态中具有决定性地位，本轮疫情对长三角地区的企业影响大，威马汽车的整车工厂虽然不在上海，但由于物流等原因也受到很大影响，“我们好几家供应商都在上海的嘉定、松江等地区”。

Like WM Motor, Ideal Auto is also facing multiple challenges. Taking into account the impact of battery costs and fluctuations in raw material prices, Ideal raised the price of its only electric car by 11,800 yuan on April 1.

“原材料的价格波动会转嫁到终端消费者身上，最终会影响市场需求。”理想汽车总裁沈亚楠说，今年一季度部分零部件价格上涨的情况已经比较严重，但由于企业有一定的库存，所以整体成本受到影响不大。从第二季度起，新能源车企面临电池价格上涨等挑战，纷纷上调价格。

Cui Dongshu, secretary general of the China Passenger Car Association, analyzed to reporters that the recent Chinese new energy vehicle market has been affected by consumers' expectations of rising prices for new energy vehicles. Before the price increase, the market was hot and orders were sufficient. However, the intensified shortage of new energy vehicles in April and the impact of the epidemic have led to serious delays in undelivered orders. The China Passenger Car Association estimates that the current undelivered new energy vehicle orders are between 600,000 and 800,000.

理想汽车同样面临交付的困难。沈亚楠介绍，理想汽车约80%的上游供应商都处于疫情较严重地区，其中大约只有一半供应商开始恢复生产，很多供应商没办法迅速复工。

“自3月末以来，受长三角疫情影响，全行业的供应链、物流和生产被严重扰乱。理想汽车的生产受到很大影响，在现有零部件库存消化后无法继续维持生产，导致部分用户的新车交付延期。” 沈亚楠介绍。

According to statistics, Ideal Auto delivered 4,167 new cars in April and 11,034 in March; NIO delivered 5,074 new cars in April and 9,985 in March; Xpeng Motors delivered 9,002 new cars in April and 15,414 in March. The new Chinese new energy car makers, known as "NIO, Xpeng and Li Auto", saw their deliveries drop by more than 40% in April compared to March.

Industry experts said that since the new car manufacturers such as Wei, Xiaoli and Li Auto only have new energy vehicles, their delivery data is very representative. In the short term, the delivery of new energy vehicle companies has been severely hit by the epidemic. In addition, the impact of the epidemic on the budget of new energy vehicle target consumers will change their willingness to buy and change cars, which also needs to be paid enough attention.

Industrial chain: Coordinating the resumption of work

Upstream parts companies of new energy vehicle companies are also facing severe challenges. More and more companies in the new energy vehicle industry chain are accelerating the pace of resuming work and production.

Bosch, an important international company in the automotive industry chain, recently announced that it will accelerate the resumption of work and production in its Chinese business. However, Chen Yudong, president of Bosch China, revealed that the company's output capacity after resumption of work and production is about 30% to 75%, and the situation of each product and factory is different, "It is difficult to fully explain the resumption ratio."

"For Bosch, the key is to do everything possible to ensure supply and ensure that new energy vehicle OEMs do not stop production, which also takes into account the amplification effect. Because producing 1,000 yuan (sales) less auto parts may mean producing 100,000 yuan less for the whole vehicle." Chen Yudong said that Bosch China is doing its best to ensure the supply of parts for new energy vehicle companies while ensuring the safety of employees. "The factory is ready for closed-loop production, and we spare no expense, even if the logistics costs are very expensive."

A relevant person in charge of Joyson Electronics, which is adjacent to Tesla's Shanghai factory, told reporters that the company's products are supplied to mainstream new energy vehicle companies such as Tesla. Currently, the resumption rate of Joyson's Shanghai factory is about 60% to 70%, and it is all in a closed-loop production state, and logistics is not very stable.

"The automobile industry has a long industrial chain. Not only suppliers like Bosch and their first-tier suppliers, but also many more suppliers' upper-level suppliers all need to resume production." Chen Yudong said that if the supply chain of new energy vehicles does not form a "chain", it will eventually fail to produce products. For example, if a coating supplier does not resume work for coating, subsequent product processing companies will not be able to complete the next process.

Supply chains are interdependent and interdependent. Chen Yudong said that if Bosch's fourth and fifth-tier suppliers do not resume work, it will affect the output of Bosch's final products, and the "chain" cannot be formed. "Even if all our factories are closed-loop production, we cannot continue to operate if the materials in the supply chain cannot be imported."

As the epidemic prevention and control situation improves, more and more companies in the new energy vehicle industry chain are accelerating the pace of resuming work and production.

According to relevant people from CATL, all power battery manufacturing bases, including the Shanghai Lingang factory, are currently in normal production. SAIC Group revealed that under the premise of maintaining a stable supply chain and logistics, SAIC Group's vehicle companies are expected to gradually resume normal production in late May, and strive to achieve production and sales at the same level as the same period in 2021. SAIC Group will still strive to achieve annual vehicle sales of more than 6 million units in 2022, a year-on-year increase of more than 10%.

The China Association of Automobile Manufacturers also pointed out recently that industry enterprises need to strive to seize the key window period starting in May to make up for the lost production and sales.