The rapid development of Chinese domestic new energy vehicles has brought unprecedented pressure to joint venture fuel vehicles, and now, the final straw that broke the camel's back has quietly fallen.
According to data from the China Passenger Car Association, in early April this year, the retail sales of new energy vehicles in China reached 260,000 units, with the retail market share exceeding 50% for the first time! In the third week of May (13th-19th), the number of new energy passenger cars insured in China reached 168,000 units, and the penetration rate of insurance for new energy vehicles exceeded 50% for the first time, reaching 50.2%, marking the true mainstream status of new energy vehicles.
Hand in the assignment 11 years early, a milestone victory for the independent brand
Undoubtedly, the breakthrough of both new energy retail and insurance penetration rates exceeding 50%, surpassing traditional fuel vehicles, is a remarkable achievement. In 2020, China set a target for new energy vehicle penetration to exceed 50% by 2035. The reason for setting this target 15 years ahead is due to the slow progress in increasing new energy penetration rates before that.
Data shows that from 2005 to 2015, it took a full decade for the new energy penetration rate to exceed 1%; from 2016 to 2019, in just over three years, the penetration rate increased to 5%. Therefore, setting a target in 2020 to exceed 50% in 15 years was considered quite ambitious at that time.
However, what no one anticipated was the significant progress in China's new energy vehicle development in recent years. Led by BYD, including Geely, Changan, FAW, GAC, SAIC, Dongfeng, Great Wall, as well as emerging forces like NIO, Li Auto, and XPeng, many domestic manufacturers worked together. In just five years, they increased the penetration rate tenfold, achieving the established goal 11 years ahead of schedule.
What does a penetration rate exceeding 50% mean?
A penetration rate exceeding 50% carries profound implications, impacting various aspects.
For consumers, the experience of buying and using cars has undoubtedly improved. Before the rise of domestic new energy vehicles, ordinary people had limited choices when buying cars. Despite numerous brands and models, they were mostly traditional fuel vehicles. With average power and limited features, they were purely functional vehicles, leading to inconveniences during use.
For example, many traditional fuel vehicles still cannot remotely start the air conditioning. After being exposed to scorching heat in the summer, the refreshing feeling upon entering the car is something many experienced drivers have felt. However, in domestic new energy vehicles, remote control is a basic feature, significantly enhancing the driving experience. Additionally, with the inclusion of large batteries, the cost of ownership is significantly reduced. In stark contrast, domestic new energy vehicles naturally become the top choice for the new generation of consumers.
For the automotive industry, the rise of domestically produced new energy vehicles has accelerated upgrades and transformations, granting China more influence on the global stage. While the automobile industry has existed for over a century, significant changes were not seen before the 21st century. This led to joint venture brands keeping the same models for several years, even a decade or more. However, with the emergence of domestically produced new energy vehicles, a metaphorical bomb was dropped into the calm waters of the industry, driving rapid iteration and upgrades, propelling China to overtake others in the fast lane of the automotive sector.
Authoritative data reveals that prior to 2020, Chinese automobile exports hovered around 1 million units. With the rapid development of new energy vehicles, this number doubled to 2.19 million units in 2021, surged to 3.4 million units in 2022, and skyrocketed to 5.22 million units in 2023. For the first time, China surpassed Japan to become the world's largest exporter of automobiles.
This is thanks to the collective efforts of outstanding independent brands. According to data released by the China Passenger Car Association, in April this year, the domestic export volume of passenger cars reached 417,000 units, a year-on-year increase of 38%, setting a new record. Among them, the export of new energy passenger cars reached 115,000 units, accounting for 27.6% of the total export volume, with a year-on-year growth of 26.8%.
In April, BYD's passenger car exports reached 41,011 units, a year-on-year increase of 176.6%. This means that in the proportion of new energy passenger car exports in April, BYD's share exceeded one-third, reaching 35.7%. In other words, out of every 10 exported new energy vehicles, 3 are from BYD.
The outbreak of independent new energy vehicles, while joint venture fuel vehicles decline
Since the beginning of this year, excellent independent brands led by BYD have continued to compete fiercely in the automotive market, launching new models in their series of glory editions, making "electricity cheaper than oil" a reality. Following this trend, Wuling, Changan, Geely, and others have successively followed suit. With the collective efforts of these brands, unprecedented survival pressure has been placed on joint venture brands.
Under the impact of this wave, the territory of joint venture brands has shrunk significantly, with their market share plummeting. Even the once dominant Japanese brands in the past few years have not been spared. As for the less prominent Korean and French brands, they are finding it even more challenging.
According to data from the China Passenger Car Association, in April this year, the market share of Japanese passenger cars in China dropped to 15.2%, hitting a new low since 2013. The rankings from the "Car King" list show that among the top 10 best-selling cars, only one Japanese model, the Nissan Sylphy, is still holding on, while others like Honda Civic/Accord/CR-V, Toyota Camry/Rav4, and Honda CR-V have already been pushed out of the list. It's worth noting that these cars currently come with significant discounts at the retail level.
Continuing to look at this list, apart from the Xuan Yi and Lang Yi, the other 8 models are all new energy vehicles, with 7 of them coming from BYD. This indicates that new energy vehicles have shifted from policy-driven to market-driven, becoming a new choice for consumer travel. It also reflects consumers' recognition and acceptance of the concept of green travel. The rapid development of the new energy vehicle industry has injected new impetus into economic growth and industrial upgrading.
What's even more pleasing is that independent brand new energy vehicles are no longer synonymous with cheapness. The burden-free new forces, such as BYD, Great Wall, Geely, and Changan, along with traditional strong players, are all actively moving forward.
The BYD Tang, Qin, and Song series are prime examples of this trend, achieving remarkable success. The Tang U8, in particular, has outperformed many imported luxury cars, becoming a bestseller in the million-dollar price range. This clearly demonstrates that the allure of joint ventures and imported vehicles is fading, as domestic brands can also rise to the high-end market segment.
