Domestic subsidies for new energy vehicles are gradually being cancelled, and global new energy vehicle sales are growing rapidly

EV Sales, a US new energy vehicle sales statistics website, released sales data of new energy vehicles in various regions around the world in the first half of 2019. The total global sales of new energy vehicles in the first half of the year reached 1,117,484 units, a year-on-year increase of 47.4%. In the first half of the year, new energy vehicles accounted for 2.4% of the total global automobile sales, an increase of 0.8 percentage points compared with the same period last year. In the context of the global auto market downturn, the growth momentum of new energy vehicles is very rapid.

Overall, the growth rate of pure electric vehicles in the first half of this year was much greater than that of plug-in hybrid new energy vehicles. In particular, in June this year, the year-on-year growth rate of pure electric vehicle sales exceeded 100%, while the year-on-year growth rate of plug-in hybrid vehicles was 67%. In the first half of this year, the proportion of pure electric new vehicle sales also increased from 69% last year to 76%.

Domestically, data from the China Association of Automobile Manufacturers showed that in the first half of this year, China's production and sales of new energy vehicles reached 614,000 and 617,000 units respectively, up 48.5% and 49.6% year-on-year, maintaining a steady growth trend.

The booming development of my country's new energy vehicle market has always been inseparable from the strong support of national policies, especially the subsidy policy for new energy vehicle companies. However, "subsidies" are bound to be difficult to sustain in the long run, and the development law of the industry will eventually return to the law of the market. Since 2017, the upper level has gradually reduced preferential subsidies for the purchase of new energy vehicles, and will completely cancel them by 2020. The purpose is to force the new energy vehicle industry to increase its innovative development capabilities and promote the healthy development of the industry.

In March this year, the release of the "Notice on Further Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles" heralded the advent of the post-subsidy era in the new energy market. In the second half of 2019, new energy vehicles bid farewell to huge subsidies and officially entered the "post-subsidy era". With the end of the subsidy transition period on June 26, the new subsidy policy will be officially implemented, and the subsidy reduction for new energy vehicles will reach up to 60%. Regarding the arrival of the post-subsidy era, some people in the industry said that this may be a "life-or-death disaster" for new energy vehicle companies, and the new energy vehicle industry will usher in a new round of reshuffle.

Some industry insiders believe that the gradual cancellation of the new energy vehicle subsidy policy is a major change in the management of new energy vehicles. It will have three far-reaching impacts on new energy vehicle companies: first, it will force uncompetitive new energy vehicle manufacturers to gradually withdraw from this fast-growing industry; second, it will force new energy vehicle manufacturers to improve their core competitiveness through technological innovation; and third, it will effectively promote the long-term and healthy development of the new energy vehicle industry.

The decline in subsidies will certainly bring pressure, but after squeezing out the water, it also means a more fair market environment for some strong automakers. If relevant automakers want to survive and gain a foothold in the fierce competition, they must strive to improve their core technologies to a new and higher level, while significantly reducing costs in all aspects. For electric vehicles, only when the output is larger, the cost will be lower.

It is a common consensus among countries around the world that new energy vehicles will replace fuel vehicles. Although there will be many challenges in the replacement process, with the continuous improvement of core technologies of new energy vehicle companies, the future prospects of new energy electric vehicles will definitely be very broad, and will also be recognized and loved by more consumers.