Are new energy vehicles going to the countryside still the "honey" of A00-class pure electric vehicles?

At the end of May, as the four ministries and commissions jointly issued a document announcing the launchof new energy vehiclesto the countryside, the long-rumored new round of new energy vehicles to the countryside finally came true.Compared with last year's New Energy Vehicles to the Countryside event, this year's event was launched relatively late, but it was stronger in terms of coverage and promotion diversity.

The four ministries and commissions clearly stated in the "Notice on Launching the 2022New EnergyVehicles Going to the Countryside Activities" that enterprises related to the new energy vehicle industry that participate in the "going to the countryside activities" are encouraged to actively participate in the "Double Product Online Shopping Festival" and various online promotions organized by various platforms. At the same time, encourage local governments to introduce more support policies for new energy vehicles to go to the countryside.Prior to this, various car companies have taken strong promotional measures to cooperate with the state's 60 billion passenger car purchase tax reduction plan.In this context, Yang Hongsong, a strategy and policy consultant of China Automobile Research Institute, pointed out that this new energy vehicle to the countryside activity is more like a national promotion organized by car companies in form.

In addition to stronger promotions, more companies and models participated in this year's new energy vehicles going to the countryside activities than last year.According to the notice list, 26 companies participated in the activities of new energy vehicles going to the countryside this year, an increase of 8 compared to last year; 72 models participated in the activities of new energy vehicles going to the countryside, an increase of 20 models compared with last year.Among these new energy products, A00-class pure electric vehicles still occupy most of the proportion.

Car companies and models participating in the 2022 New Energy Vehicles Going to the Countryside Activities, picture source: official website of the Ministry of Industry and Information Technology

The activities of new energy vehicles to the countryside have spawned the A00

Since July 2020, the state has organized activities for new energy vehicles to go to the countryside for three consecutive years.Among them, the 2020 New Energy Vehicles Going to the Countryside activity took more than 5 months to achieve sales of 180,000 units. Among them, A-class and A00-class pureelectric vehiclesbecame the main models for going to the countryside, and Hongguang MINIEV, as the representative of A00-class pure electric vehicles, borrowed The machine became a hit.In 2021, the sales of new energy vehicles to the countryside will reach 1.068 million units, a year-on-year increase of 169.2%. A-class and A00-class pure electric vehicles are still the main force.

In view of the fact that A00-class pure electric vehicles have been the main models of new energy vehicles going to the countryside in the past two years, as these types of vehicles are selling well in restricted cities and vast rural areas, more and more car companies have continued in this field in the past two years. Overweight, for example, SAIC-GM-Wuling launched Wuling NanoEV and Baojun KiWiEV in addition to Hongguang MINIEV; Chery added Chery QQ ice cream in addition to the small ant series products; Changan Automobile quickly launched the Benben E in the A00-class field. -After Star, Lumin was launched this year.In addition, uncommon car brand products such as Redding Mango, Punk Duoduo, and Lingbao BOX have also poured into the A00-level camp, and have taken a place in the sales list with Dongfeng, which is driven by new energy vehicles to the countryside.

Changan Lumin, image source: Changan Automobile

In the notice list of new energy vehicles going to the countryside released this year, the A00-class models mentioned above are all listed. Does this mean that, as in previous years, the new-energy vehicle going to the countryside activities have once again become the main battlefield of A00-class products?

Rising prices hinder

Analysts pointed out that compared with previous years, the main factor restricting the development of the A00-class pure electric market this year is the increase in cost caused by the price increase of raw materials.Since the second half of last year, the rising price of raw materials for power batteries has caused some A00-class pure electric vehicles, which are known for their low or no profits, to be almost stopped.As early as February this year, Dong Yudong, CEO of ORA Automobile, publicly stated that due to the increase in raw material prices and the decline of new energy subsidies, ORA’s black cats and white cats lost 17,000 yuan each time they sold one.Under the pressure of cost, car companies have to raise the official guide prices of some of their new energy products. Among them, in the A00-level field, the prices of Hongguang MINIEV, Leapmotor T03, Changan Benben E-Star and other models have increased.

After the price rises, it will affect the sales performance of the terminal market to some extent. Take Hongguang MINIEV as an example. In the past, its main product was a pure electric scooter of 30,000 yuan. Now, after the price increase, the price of entry-level models has risen to 32,800 yuan. , the recently added Hongguang MINIEV GAMEBOY version has a maximum price of nearly 70,000 yuan, and the price is close to A0-level products.After the price increase, Hongguang MINIEV still ranks first in the sales list of A00-class models, but its sales in April showed a year-on-year decline of 7.08%.

Hongguang MINIEV sales performance in recent months

Analysts from Gasgoo Automotive Research Institutebelieve that users of A00-class pure electric vehicle products in some rural areas are more sensitive to prices. This round of new energy vehicle price hikes will have a certain impact on the sales performance of A00-class products in rural areas. Enterprises will launch more powerful promotion policies in cooperation with the new energy vehicles going to the countryside activities. It is not ruled out that the entire rural market will release a certain demand for A00-class models.

SAIC-GM-Wuling issued a subsidy promotion policy of 1 billion in June. Image source: SAIC-GM-Wuling

It is understood that in response to the current state-issued package of policies to promote consumption in the auto market, various regions have launched more attractive subsidy programs on this basis. Among them, Guangzhou, Shenzhen and Shanghai have not only issued car purchase subsidies, but also increased car purchases accordingly. In response to the national consumption promotion policy, some car companies have also given various discounts. For example, SAIC-GM-Wuling announced that it will issue a car purchase subsidy of one billion yuan in June. Among them, Hongguang MINIEV proposed a financial plan of "down payment of 99 yuan". .Such preferential policies may help improve the acceptance of A00-class new energy vehicles by rural residents.

The rural market has great potential for electrification, but it is still difficult to popularize

Judging from the selling prices of 72 models participating in this year's new energy vehicle going to the countryside activities, most of their products are priced below 150,000 yuan, and only a few are priced close to 200,000 yuan. An important threshold that consumers in rural areas can accept when purchasing new energy vehicles.The price of A00-level pure electric products is generally less than 50,000 yuan. This relatively cheap price will help to form a substitution effect for low-speed electric vehicles in rural areas.

Relevant statistics show that there are currently more than 6 million four-wheel low-speed electric vehicles in the country. Most of these vehicles are concentrated in third- and fourth-tier cities and rural areas. If A00-class pure electric vehicles are effective replacements for four-wheel low-speed electric vehicles , then it will directly drive the rapid growth of A00-class pure electric vehicles, and also help to improve theelectrificationof the rural vehicle market.Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, once pointed out that the income of rural residents across the country is growing rapidly, and the income level of rural residents in some economically developed areas is close to that of second-tier cities. The penetration rate is low, among which the electrification rate of rural residents' vehicles is less than 1%, which is only 1/3 of urban residents, and there is sufficient room for growth in the future.

There are also voices in the industry that although the rural automobile market has great potential for electrification, the current rural consumers' awareness of traffic regulations and the supporting facilities of electric vehicle charging piles need to be improved, which will affect the rapid popularization of electric vehicles in the rural market.For a long time, rural residents have a small travel radius and more flexible travel, so two-wheeled electric vehicles and four-wheeled low-speed electric vehicles are very popular among rural consumers.Among them, four-wheeled low-speed electric vehicles are also known as "Old Man Le". Because drivers are not subject to driver's license restrictions and do not need to pay additional insurance fees, it solves the pain points of the elderly when traveling, so it is in the third and fourth lines. Urban and rural areas are prevalent.

However, in order to regulate old-age scooters, five ministries and commissions reported the "Request for Instructions on Issues Concerning the Management of Low-speed Electric Vehicles" in 2015, which was approved by the State Council; in 2017, old-age scooters were again "warned"; in June last year , the Ministry of Industry and Information Technology jointly revised the standards for low-speed electric vehicles, which stipulates that old-age scooters are included in the management of motor vehicles.This means that older scooters have to pay insurance, apply for licenses, and hold a driver's license on the road just like other motor vehicles.However, although the state requires the elderly to be "regularized", these vehicles are still active on the roads of towns and rural areas because they solve the actual pain points of the elderly's travel.

In view of the current situation, industry insiders pointed out that if A00-class pure electric vehicles want to replace low-speed electric vehicles on a large scale in the rural market, in addition to providing more powerful subsidy policies, it is necessary to increase the support for rural consumers, especially the elderly. Education, policy and regulation constraints and encouragement and guidance go hand in hand.