The Chinese automobile market is facing changes and challenges in pure electric and hydrogen energy

The human automobile industry has a history of more than 100 years. The Chinese automobile industry has also gone through half a century and has long grown into the world's largest automobile market. Today, China's automobile industry is facing unprecedented changes and challenges. In the long run, whether it is energy security issues or global climate issues, the automobile industry will be forced to complete major transformations and upgrades in many aspects such as energy, technology and system, giving the automobile industry new development momentum. At the end of 2021, with the superposition of long and short cycles, the new energy vehicle industry is completing a key transformation from policy products to market products. The post-dividend era is full of crises. Let's see how it will play out in 2022.

The development of new energy vehicles has a profound impact on many related industries. It will give rise to some new tracks, such as power batteries and their upstream industries; it will change the competition pattern and business logic of some tracks, such as car manufacturing itself and the automotive aftermarket; it will promote each other and develop together with some tracks, such as the electrification and softwareization of automobiles to autonomous driving. The development of new energy vehicles and the tracks they affect will be one of the main lines of global economic development in the next few decades, an important means for the world to achieve carbon neutrality goals, and a major opportunity for China's automobile industry and related industrial chains to overtake others and rise to a number of globally influential companies. It also affects the daily lives of each of us.

The passenger car market has entered an active destocking cycle. Compared with other consumer goods, automobiles have two obvious characteristics, so they have the conditions to produce an inventory cycle. First, the automobile production process has obvious "heavy industry" characteristics. Automobile manufacturers have large production lines, large capital investments, and long production capacity increase and decrease cycles; second, the sales model is relatively special. Most of my country's automobile sales adopt the 4S model, and the overall inventory of dealers and manufacturers is heavy, and it takes a relatively long time to increase or decrease inventory. Under the influence of these two characteristics, the supply and demand gap in the automobile market takes a long time to repair, which will produce obvious fluctuations, thus leading to cyclical changes in inventory.

The track of new energy vehicles is still short, and the construction of an electrified, intelligent, networked, and shared industrial chain requires the support of a sound investment and financing system. However, participants agreed that the current venture capital in the new energy vehicle industry is mostly a "blind man touching an elephant" type of docking, which can be described as "blind-busy-confused", that is, investors blindly invest, entrepreneurs are busy with financing, and finally both parties end up at a loss. On the one hand, new energy vehicle investors often cannot find matching projects, cannot grasp the mentality of entrepreneurs, and find it difficult to form advantages in the industrial chain and collaborative circle; on the other hand, most new energy vehicle entrepreneurs are technology-driven entrepreneurs and lack investment and financing management experience. In this regard, Zhao Shaoxing, general manager of Beijing Zhonghe Zhiche Technology Co., Ltd., has a deep understanding. He said that only carrying out technology research and development cannot be transformed into productivity.

The capitalization of new energy vehicles is a system involving financing, listing, team composition, market value management, equity structure, mergers and reorganizations, etc. From an investment perspective, it is necessary to focus on the development direction, scale, growth rate, and profit model of the project, and at the same time strengthen project investment and financing management and standardize the investment and financing environment.

The development paths of the automotive industry are very different. Under the pressure of climate issues, countries around the world are relying on their own technological resources to carry out research and development of different technical paths. Common new energy power technologies include hybrid, plug-in hybrid, extended-range electric, pure electric and hydrogen fuel cells. Chinese companies have relatively successful products in many fields and maintain a leading position, only lagging behind in hydrogen energy technology. Today, there is still much controversy about the two major development paths of pure electric and hydrogen energy power, and we are now at a crossroads in the development of energy technology.

The digital upgrade of traditional industries has ushered in new development opportunities. In the "new infrastructure", 5G, big data, artificial intelligence, industrial Internet, etc. have become the focus of development in the next stage, which is of great significance to the construction of smart cars, smart transportation, and smart city related facilities. The application of big data and industrial Internet technology will promote the transformation of the business model of the automotive industry. By providing support for the digital development of manufacturing, the overall level of digitalization and intelligent manufacturing in the automotive industry can be improved. The promotion of "new infrastructure" will accelerate the speed of innovation in areas including automotive technology research and development, business models, and production models, and will have a disruptive change on the automotive industry.