As national subsidies decline, how badly are new energy vehicles doing after emerging from the greenhouse?

New energy vehicles have been listed as an emerging strategic development priority in China's "13th Five-Year National Industrial Plan"; by 2020, the production capacity of pure electric vehicles and plug-in hybrid vehicles will reach 2 million units, and the cumulative production and sales volume will exceed 5 million units. 

Recently, there have been reports that the New Energy Vehicle Automation Technology Exhibition originally scheduled to be held in Shanghai from October 30 to November 1 has been postponed for some reason.

Currently browsing the official website of the exhibition, it is found that the exhibition date shown on the official website has been changed to August 7-9, 2020, but the specific exhibition schedule has not been modified yet. In this regard, the staff of the exhibition organizing committee stated that the postponement is true, and the main reason for the postponement is that the subsidies for new energy vehicle companies have weakened, resulting in a weakening willingness of new energy vehicle manufacturers to participate in the exhibition.

The words "state subsidies" have touched people's nerves. As state subsidies decline, many new energy vehicle companies have been involved in a storm of doubts in recent days, and new dramas have been staged one after another. Some experts said that although there are many new energy vehicle companies in China, most of them do not have core technologies. As policy subsidies disappear, they will leave this track because they have no "skills" to use.

The policy decline has brought new energy vehicle companies that have grown in a greenhouse into a severe challenge of “stepping out of the greenhouse”.

In the first month of the official implementation of the "New Decline Policy", the new energy vehicle market immediately cooled down. According to data released by the China Association of Automobile Manufacturers on August 12, in July 2019, my country's new energy vehicle production and sales reached 84,000 and 80,000 respectively, a month-on-month decrease of 37.2% and 47.5%, and a year-on-year decrease of 6.9% and 4.7% respectively. This is the first year-on-year decline in China's new energy vehicles since January 2017.

During this cold wave, the subsidy reduction has made things even worse for small passenger cars (i.e. sedans).

Battery manufacturers choose to cooperate with car companies in production and support each other. Since 2018, vehicle manufacturers including Dongfeng, GAC, BMW, Jiangling, and Geely have chosen to "marry" the power battery "unicorn" CATL, making CATL the company with the most joint ventures with car companies in the power battery field.

Compared with traditional cars, new energy vehicles started almost at the same time for domestic and foreign counterparts, and they are facing new things, new industries and new problems together.