The long-lost joint venture brand new energy vehicle will fully enter the market harvest results

In the past five years, it would have been hard to imagine that Zhangzhou, a city located in southern Jiangxi Province, would become a new symbol of the automotive industry. From 2015 to now, the total investment in eight large-scale new energy vehicle projects in Zhangzhou has reached 47.5 billion yuan, with only one project having an investment below 6 billion yuan. Let’s take a closer look at this transformation through the eyes of our car electronics editor. So far, more than 90 new energy vehicle companies and their supporting enterprises have established themselves in the Economic Development Zone of Zhangzhou. These include major central state-owned enterprises, private electric vehicle manufacturers, and even Taiwanese electric vehicle brands. [Image: The long-lost joint venture brand new energy vehicle will fully enter the market harvesting results] The resurgence of joint venture brand new energy vehicles is set to change the market landscape completely. This marks a new level of investment attraction that has not been seen in decades. In 2016, Cangzhou was just beginning to rise from third-tier status, and its rich rare earth resources made it a hot spot for battery manufacturers and electric vehicle companies. Even without rare earths, cities like Huzhou and Jiaxing in Zhejiang, Tongling in Anhui, Shangrao in Jiangxi, Weinan in Shaanxi, Yinchuan and Lingwu in Ningxia, and Lanzhou in Gansu have struggled to compete with the automobile industry. Instead, they are turning their attention to mid-western cities where traditional car manufacturing has long been dominant. Cities like Zhangzhou have become lucky spots for multi-billion-yuan new energy vehicle manufacturing projects. Nanjing, Hangzhou, and Chongqing in the Yangtze River Delta are emerging as second-generation large-scale automobile cities, following in the footsteps of Changchun, Wuhan, Beijing, Shanghai, and Guangzhou. With the surge in new energy vehicle investments, a new era of Chinese automotive development is unfolding. According to incomplete statistics from public company information and provincial and major city NDRC project approvals, from 2015 to the first half of 2017, there were 202 new energy vehicle production projects in China, involving a total investment of 106.2 billion yuan. The planned production capacity is 21.24 million units—ten times the target of 2 million new energy vehicles by 2020. If we include projects launched in 2013 and 2014, the total investment in new energy vehicle manufacturing has already exceeded 1.5 trillion yuan. This signals the birth of a brand-new Chinese automobile industry. Statistics show that new energy vehicle investment has covered all provinces, autonomous regions, and municipalities on the mainland, excluding Hong Kong, Macao, and Taiwan. A total of 135 cities have new energy vehicle projects, and 20 provinces have started building “new energy automobile industrial parks.” Nearly 10 new landmark automobile cities are emerging, with central and western provinces such as Henan, Anhui, Shaanxi, Sichuan, Guizhou, and Yunnan becoming hotspots due to low land costs and strong local government support. Of the 202 new energy vehicle projects, 110 are known to cover over 140,000 mu of land. To put that into perspective, that’s equivalent to the area of 130 football fields in the Forbidden City or 13,333 World Cup stadiums. And this is only half of the total. While it may seem hard to grasp from an outside perspective, it’s clear that the scale of this automotive revolution is immense. In fact, “all-car-making” is becoming a symbol of China’s next manufacturing revolution. Policy-driven incentives have fueled trillions in investments. In October 2016, the State Council stated that no new traditional fuel vehicle production enterprises would be approved. In December 2016, the “13th Five-Year National Strategic Emerging Industry Development Plan” was officially released, reiterating the strategic importance of new energy vehicles. By now, all provinces (excluding Hong Kong, Macao, and Taiwan) have issued plans and subsidy measures to promote the new energy vehicle industry. In 2016, China sold 507,000 new energy vehicles. The China Association of Automobile Manufacturers forecasted sales of 800,000 units for 2017. China aims to achieve a breakthrough and become the global center of new energy vehicle manufacturing and consumption. Driven by the passion of internet-based car startups, electric vehicle component manufacturers, and tech companies entering the automotive space, new energy vehicles—especially electric vehicles—have significantly lowered the technological threshold compared to traditional cars. This has created booming opportunities for both investors and local governments. In 2015, there were 48 national new energy vehicle investment projects totaling 218.983 billion yuan; in 2016, 100 projects totaling 501.972 billion yuan; and in the first half of 2017 alone, over 50 projects were announced, with investments exceeding 270 billion yuan and planned production capacity reaching 5.7 million units. Unlike the tightly controlled traditional auto industry in the past 30 years, the opening of new energy vehicle investment has given social capital a chance to invest heavily in the sector. By the first half of 2017, new energy auto industry funds, co-established by local governments and social capital, had been formed nationwide. This unprecedented concentration of resources and capital influx presents a rare opportunity for the Chinese automobile industry. As a capital-, technology-, and labor-intensive enterprise, the automotive industry has always been a pioneer of intelligent manufacturing. The current technological revolution in the automotive sector could drive the entire Chinese manufacturing industry forward—a transformation we are most eager to witness. Changes in top-level design are also coming. After issuing 15 new energy vehicle production licenses in June 2017, the NDRC paused further approvals. Sources suggest that instead of raising barriers, the move was intended to allow free competition and accelerate technological upgrades through market mechanisms. “Initial overcapacity is normal, and the final product will survive or be eliminated naturally,” said Xu Changming, director of the Information Resource Development Department at the National Information Center. In 2018, the new energy vehicle points system was implemented. In 2019, subsidies were fully withdrawn, and the long-awaited joint venture brand new energy vehicles will now flood the market. At that point, over 90% of local new energy vehicle production capacity will face reshuffling and elimination. The tide has only just begun, and more changes are expected in the future. This article provides an introduction to the long-raging joint venture brand new energy vehicles in the automotive electronics sector. For more detailed and updated information, please stay tuned. Electronic Engineering will continue to bring you comprehensive updates.

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