Recently, data released by the China Association of Automobile Manufacturers showed that in the first four months of this year, my country’s production and sales of new energy vehicles reached 4.429 million and 4.3 million respectively, up 48.3% and 46.2% year-on-year respectively. Among them, the sales of new energy vehicles accounted for 42.7% of the total sales of new vehicles. It is worth noting that the new energy vehicle market is still in a stage of rapid development. Relevant reports show that my country’s new energy vehicle sales (including exports) are expected to reach 16.5 million in 2025, maintaining a growth rate of 30%, and the domestic market penetration rate is expected to exceed 55%; in 2030, my country’s new energy vehicle penetration rate will exceed 70%.
With the rapid development of new energy vehicles in my country, the automotive industry landscape is being subverted, traditional automobile cities are being impacted by emerging automobile cities, and the competitive landscape of cities is being reshaped. In 2024, Chongqing’s automobile production will be 2.5401 million vehicles, including 953,200 new energy vehicles, a year-on-year increase of 90.5%. Due to the strong rise of the automobile industry, Chongqing has surpassed Guangzhou in terms of economic output and ranked fourth in my country’s economy.
The importance of the new energy vehicle industry to a city is self-evident. Experts from CCID think tank said that driven by the competition among cities to seize new tracks and seek new paths for regional economic leapfrogging, my country has initially formed a new energy vehicle “one super and many strong” urban cluster pattern with Shenzhen as the leader and Hefei, Shanghai, Xi’an and other cities developing together.
- Three development paths of the new automobile city
The new energy vehicle industry breaks through the traditional path dependence and promotes a fundamental change in the logic of regional competition. This change is not only a competition of technological iteration, but also an all-round competition among cities in industrial planning, resource allocation, and institutional supply. It will reorganize the space of industrial elements and reconstruct the value chain to reshape the regional economic map.
According to CCID think tank analysis, since my country clarified the access management rules for new energy vehicle manufacturers and products in June 2009, local governments have supported the development of the industry, and it has now shown regional cluster development characteristics, with three main types of development typical: technology leap, transformation breakthrough, and chain supplement rise.
The technology leap type is represented by cities such as Shenzhen, Hefei, and Xi’an, which lead the way with technological innovation. In 2024, the total output of new energy vehicles in the three cities will be 5.436 million, accounting for 42.2% of the national total.
Shenzhen has leapt from scratch to become the world’s first city for new energy vehicles through the “leading enterprises + innovation-driven + full industrial chain collaboration” model. In 2024, Shenzhen’s new energy vehicle production will be 2.935 million, a year-on-year increase of 69.4%, accounting for 22.8% of the national market share. Relying on leading companies such as BYD and Huawei, Shenzhen has formed a full industrial chain ecosystem of “complete vehicle + battery + intelligent network connection”. Hefei has created a “capital investment + full chain aggregation” model, realizing the transformation from “weak automobile market” to “industry upstart”. In 2020, Hefei’s new energy vehicle production was only 52,700 vehicles, surpassing Shanghai in 2024 and jumping to 1.376 million vehicles. Hefei “invests to attract” by attracting the headquarters base of Weilai through state-owned capital, attracting factories such as BYD and Volkswagen to settle in, and cultivating more than 300 core parts and components supporting enterprises to form a complete industrial chain closed loop.
Shanghai, Chongqing, Liuzhou and other cities are representatives of transformation breakthroughs, accelerating technological innovation and product upgrades, and demonstrating the transformation resilience of old industrial bases. In 2024, the total output of new energy vehicles in the three cities will be 3.0158 million vehicles, accounting for 23.4% of the national total.
Taking Chongqing as an example, the city has achieved industrial upgrading with “high-end intelligent manufacturing”, and its products continue to develop towards high-end. In 2024, the proportion of new energy models “made in Chongqing” with a price of more than 200,000 yuan will reach 48.3%, an increase of 21.6 percentage points year-on-year, and the average sales price of new energy vehicles will be about 236,000 yuan. At present, Chongqing has 19 complete vehicle companies and 1,200 parts companies, forming a full-chain closed loop of “materials-parts-complete vehicles-services”.
Changzhou, Zhengzhou, Jinan and other cities are representatives of the rising type of supply chain, strengthening breakthroughs in subdivided fields, and forging ahead with great development potential. In 2024, the total output of new energy vehicles in the three cities will be 1.926 million, accounting for 14.9% of the national total.
Taking Changzhou as an example, through the “battery full chain leading + vehicle investment promotion” model, an innovative path of driving the development of the whole vehicle by key components is realized, and leading enterprises such as CATL, Honeycomb Energy, and China Innovation Aviation are gathered to form a full chain layout of positive electrode materials, diaphragms, and electrolytes. The sales volume of power batteries is close to 1/5 of the national total. In 2024, the scale of its new energy industry will exceed 850 billion yuan, giving full play to the advantages of batteries, and successfully attracting vehicle companies such as BYD and Ideal Auto to land. - What should be paid attention to in the development of new energy vehicles
CCID Think Tank believes that from the current situation of the development of new energy vehicle industry in major cities, there are three major problems:
First, the city’s resource-based investment promotion affects the investment decision of enterprises to a certain extent, and the sustainable development of enterprises in the region has not been fully considered. In recent years, local governments have generally adopted a combination of fiscal and tax incentives + land supply + supporting guarantees to attract enterprises. Some cities even compete for investment with policies such as building factories, tax refunds, and employment subsidies. This has put a test on the local fiscal affordability of some cities in the central and western regions. Some companies have even relocated their production capacity to other places just to obtain more policy benefits, forming “migrant projects”.
Second, cities have insufficient research on their own resource endowments, and homogeneous competition is prominent. The industrial layout of some cities lacks in-depth research and judgment on their own resources, and simply copies the standardized template of “complete vehicle + battery”, resulting in regional industrial homogeneity. For example, a number of planned battery industrial parks are mainly concentrated in mature technology routes such as lithium iron phosphate, with insufficient investment in high-end frontier fields, and homogeneous layout leads to structural contradictions. Cities in the central and western regions have introduced complete vehicle assembly projects, but the localization rate of core components is low, and a large number of them need to be purchased from other places.
Third, there is insufficient coordination between cities and inefficient layout of the industrial chain. For example, there is a lack of unified standards for autonomous driving road test data, and cities cannot communicate across cities. Companies need to repeatedly apply for road test licenses in different cities, which increases the testing costs of autonomous driving companies and affects the efficiency of the iteration of autonomous driving system (ADAS) technology.
Leave a Reply