The release of important news is usually unexpected.
On the afternoon of Saturday, October 24, 2020, the Shanghai Public Security Bureau suddenly announced new restrictions on traffic, further extending the time limit on non-Shanghai license plates on the elevated roads and ring roads, and more importantly, starting from the first working day after the May Day holiday next year, vehicles with non-local license plates will be prohibited from entering the inner ring road surface roads during peak hours.
After the announcement of the policy, our group of car enthusiasts quickly began discussing the issue, sharing videos of crowded stores, which is a boon to the sales of new energy vehicles.
This is the first time that Shanghai has announced road restrictions that prohibit vehicles with non-local license plates from entering the inner ring road area. In my opinion, this is also a response to the call made by the National Development and Reform Commission in 2019 to accelerate the transition from restricted purchases of new energy vehicles to guided usage.
As a city with highly developed economy, Shanghai covers an area of only 6,340 square kilometers, with a permanent population of nearly 25 million and a number of 4.15 million registered cars, 1.67 million of which have license plates from other provinces or cities, accounting for more than 40%. If Beijing has the highest number of registered vehicles in the country with over 6 million, compared to its land area of 16,410 square kilometers, Shanghai’s density of car ownership is truly remarkable.
The increasing number of cars has caused traffic jam, making driving during peak hours in Shanghai a difficult experience. Therefore, the “restriction order” was not surprising. However, for the large number of non-local car owners, they will face a new choice: to purchase a Shanghai license plate or to choose a relatively unfamiliar new energy vehicle.
In the Shanghai license plate auction just ended in October, 140,000 individual licenses were put up for auction, with a minimum transaction price of 90,600 yuan for non-commercial plates and a winning rate of 12.7%. For those who are not familiar with the Shanghai license plate auction rules, this winning rate may seem too low. In fact, those who have participated in the auction know that this rate is quite high compared to previous years, and the regular winning rate should be around 6%.
A metal plate worth more than 90,000 yuan and the time-consuming auction cycle can be a bit discouraging for some potential car buyers. Will new energy vehicles be the best solution for the restricted driving policies?
I asked a few friends who are considering buying or replacing their cars to see what their choices are like.
BMW M4 and Mercedes-Benz C63S Dual Owners
We first met in the Audi modification circle of Volkswagen. He has an Audi TTS, and I have a Volkswagen R20. The almost identical car hardware made us have almost the same choices in modification.
After we got tired of the second-order modification part, selling cars became inevitable. I chose to try out new energy vehicles, and he went down the route of high-horsepower rear-wheel drive. He is not like some paranoid mod players who dislike electric cars, but he merely does not object to them.
Unexpectedly, the new restricted driving policy allowed us to become car friends again.
Since both his cars are foreign-registered, although he lives and works on the outer ring, he often visits customers in downtown Shanghai. Therefore, obtaining a Shanghai license plate before Labor Day next year has become his most important and urgent work at the current stage, which is purely for the sake of buying a car to get a license plate.
After years of listening to the roaring sound of his three-way straight-through exhaust system, he suddenly felt the loss of handling and decided to change to a quiet and comfortable car, which is also an option. Therefore, excellent workmanship, ultimate after-sales service, and the existence of a NIO power-swap station near his home make the NIO ES6 his top choice.
Eighth-generation Guangqi Honda Accord Owner
He is from Inner Mongolia, currently living near the middle ring of Shanghai, and works at Yishan Road in the inner ring. In fact, the eighth-generation Accord has always been my favorite of the best-looking Accords. Although its engine and gearbox are not good in terms of performance, it is excellent for family use. During the 10 years he has been driving, his Accord has almost never had any issues, making him a loyal Honda fan.
As a need-to-get-a-Shanghai-license-plate user, he has never considered new energy vehicles because of the long journey and the lack of charging facilities in Inner Mongolia. Original plans were to buy another Guangqi Honda Odyssey after obtaining a Shanghai license plate, but he has been hesitant to replace his car due to the high cost of obtaining the license plate. The new restricted driving policy has accelerated his pace of changing cars, and based on my recommendation, his ideal ONE for getting a Shanghai license plate and Odyssey to be registered in Shanghai will still take a while for him to decide on.
Audi S3 Owner
The third friend is the master of my previous modification circle, also known as the internally-combusting vehicle user whom I called a bit paranoid. He is a native of Shanghai and has an Audi S3 with a Suzhou license plate that can break 100km/h in just 2.9 seconds. The purchase tax is barely second to a supercar, and it has always been his best improv show.For someone who has no requirement for travel radius, he is only interested in pure driving pleasure. “I wouldn’t even buy an electric car if I can ride a child’s bike,” was the harshest thing he ever said.
If I talked to him about new energy vehicles in the past few months, he would either criticize new energy in every way possible with a thousand different reasons, or if I had won the argument, he would block me and we would lose contact.
After the new driving restrictions were announced, he surprisingly brought up Tesla with me. He still has no concept of FSD, and mostly uses traditional petrol car thinking to understand Tesla. A sentence “But it’s still an electric car” made me sure it was him behind the WeChat message. I understand his reluctance to change, but nobody can stop the tide of technological progress.
Regarding the future, all I know is that after he’s done with his Audi S3, he will get a Model 3 Performance, because in terms of his demand for cars, there really isn’t much choice. Of course, I will also remind him to ship the child’s bicycle in his Taobao shopping cart as soon as possible.
At the same time, I asked a NIO Fellow about this matter. He stated that recently, there has been a significant increase in customers visiting the store; they clearly have the intention of purchasing a new energy vehicle, but they are undecided on which brand to choose. On October 25th, their store received nearly 100 orders in a single day, and it felt like he wasn’t a Fellow but a cashier.
He also mentioned that there is still a large group of people who cannot accept new energy vehicles in the short term and will choose to bid for license plates. Therefore, in the future, the license plate market will continue to be hot, and the transaction price of Shanghai license plates is expected to exceed RMB 100,000.
Looking at the characteristics of consumers who urgently want to purchase vehicles these days, it is mainly the group of users who already have some understanding and knowledge of new energy vehicles that have converted early, and have incubated a new group of users who did not originally consider new energy vehicles. As the promotion and popularization of new energy markets continues, will Shanghai’s new energy green plate policy be tightened in the near future?
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.