The development status of hybrid HEV vehicles in China

Before the end of August, I would like to sort out and share the current status of hybrid vehicles (unless otherwise specified in this article, hybrid refers to non-plug-in HEVs) in China, using China’s retail data.

From the data from January to July, we can draw the following conclusions:

1. The promotion of hybrid products is a spontaneous process for manufacturers to replace their own fuel vehicles, so it is highly planned. Currently, Toyota and Honda, the two most determined companies, have made good progress. Under their leadership, the retail volume of hybrid vehicles from January to July was 293,100.

2. The growth of hybrid vehicles will mainly depend on Nissan. As for other brands, it remains to be seen whether Great Wall's hybrid strategy for the Wey brand is effective; Lynk & Co's hybrid strategy seems to be intermittent and lacks determination, which is also related to the status of Lynk & Co's PHEV.

3. From a regional perspective, hybrid vehicles do not have a particularly big advantage in cities with purchase restrictions, but this has a lot to do with the distribution of Japanese cars in the country (brand preference).

4. The strategy of selling hybrid vehicles is not that consumers choose this type of car because of the fuel-saving effect of economic balance, but it is more like a built-in attribute in the power configuration. From the perspective of price range, the sales volume of hybrid vehicles in the 100,000-250,000 yuan range is 91,500 units, 150,000-200,000 yuan range is 1,399 units, 200,000-250,000 yuan is currently the main sales volume, 140,000 units, and 250,000-350,000 yuan also has 60,200 units. Looking at the development direction of hybrid vehicles, after the subsidy declines, the battery may be freely adjusted from 0.5kWh to 2kwh, and then configured to the range of 10kwh.

Next, let’s take a look at the specific data and some of my own thoughts.

1. Sales distribution of hybrid vehicles in China

(1) Brand

Honda (135,500, accounting for 46%) and Toyota (156,400, accounting for 53%) are the most successful in promoting the hybrid technology route. This statement has been made since 2016. From a purely perspective, from the perspective of the recognition of hybrid itself, it is difficult for other brands to have the opportunity to bring hybrid genes to this market. From this year's expectations, the shortage of chips will also lead to hybrid supply problems. It is estimated that according to the current monthly figure of more than 41,800, it will slow down later. The full-year forecast is less than the previously predicted 500,000, estimated to be around 450,000.

Figure 1 Hybrid insurance coverage from January to July 2021

(2) Price distribution

Toyota is the only company that can really achieve a price range of 100,000-150,000 yuan, which accounts for about half of its total sales, and the rest of the price is mainly between 200,000 and 250,000 yuan. Honda's main price ranges are 200,000-250,000 yuan and 250,000-350,000 yuan respectively. So the strategies of the two Japanese companies are different. Honda is doing hybrid on large cars to make large cars have compliance elements, so Honda's fuel consumption is not particularly good without new energy hedging; Toyota can also do it on small cars, and actually has the means to continue operating in the next 5-10 years, so Toyota has never been particularly anxious in the field of electrification.

Figure 2 Price range of hybrid vehicles in China

The Corolla and Levin priced between RMB 100,000 and RMB 150,000 are still very stable. Honda's Elysion and Odyssey adopt the large-car hybrid strategy, which is more sustainable than SGM's GL8 within the fuel consumption limit. For the 200,000 to 250,000 models, it can be seen that Japanese automakers hope to gradually increase the proportion of hybrids and are in a gradual planning.

Figure 3 Price range of major Chinese car models

Judging from the current data, the hybrid technology route is a supply-dependent model, allowing hybrid configurations to be mixed in with fuel vehicles.

(3) Geographical distribution

From the perspective of geographical distribution, hybrid vehicles do not have a particularly strong regional distribution. Guangdong, which prefers Japanese cars, accounts for a very large proportion. It can be considered that HEV is distributed according to the supply penetration of fuel vehicles.

Figure 4: Geographical distribution of hybrid vehicles

Figure 5: Sangji map by province

From the perspective of prefecture-level cities, Guangdong, the largest demand area, does not see a particularly high penetration rate. This can be understood as the number of fuel vehicles and hybrid vehicles purchased by consumers is positively correlated. In other words, consumers believe that there is no difference between the two.

Figure 7 Penetration in Guangdong by city

2. The development direction of hybrid

I have listed the monthly and price ranges for HEV and PHEV for everyone to see.

Figure 8 Monthly sales of HEV and PHEV in 2021

Figure 9 Price distribution of HEV and PHEV

In particular, I compared the data of HEV and PHEV models by price range, which can better reflect the problem.

summary

I think that for the current hot-selling models, the sales strategy of PHEV and hybrid is different. PHEV can break through by going for extended range. Hybrids may not be able to break through by focusing on fuel consumption. At present, only PHEV/EREV that relies on higher mileage and pure electric experience and allows users to transition to pure electric use habits will have sustainable value.