Author: Big Eye
Introduction
Recently, a consumer posted a thread on the forum of Wuling Hongguang MINI EV, saying “the newly purchased A0-class electric vehicle cannot apply for the special license plate provided for free by Shanghai for new energy vehicles. The 4S store said that they are not approving new energy license plates recently, and need to wait for the new policies starting in early May.” This text is like a deep water bomb dropped into the ocean, indicating that Shanghai, as a first-tier city with benchmark significance in China, limits the registration of A00-class electric vehicles. Does this mean that A0-class and A00-class electric vehicles will gradually fade out of the Chinese new energy vehicle market and become the focus of attention for all parties?
Wuling Hongguang MINI EV becomes an unbearable burden on Shanghai’s road resources
In China’s new energy vehicle market, the only new energy model that can compete with Tesla is Wuling Hongguang MINI EV, which costs less than 30,000 yuan. With relatively reliable quality and extremely high cost-effectiveness, especially the policy bias in terms of road rights and license plates enjoyed in first- and second-tier cities, the sales of Wuling Hongguang MINI EV remain high. Although it has not brought considerable profits to SAIC-GM-Wuling, the new energy credits it earns are also of great value.
Electric vehicles priced below 100,000 yuan, such as the Wuling Hong Guang MINI EV, are highly competitive in cities like Shanghai, which issue new energy green license plates. After all, road resources are limited in Shanghai. If one participates in the daily license lottery, not only do they need to spend 80,000 to 90,000 yuan to compete for a fuel-powered car license plate, but there is also a high possibility of not getting a plate. With the implementation of vehicle restrictions in downtown Shanghai, especially strict restrictions within the inner ring road, buying an electric car like the Wuling Hong Guang MINI EV for less than 30,000 yuan has become a highly sought-after option for daily commuting. According to relevant data, as of March 2021, sales of A00-level electric cars in Shanghai reached 4,235 units, accounting for 12.53% of total sales. SAIC-GM-Wuling’s electric cars have lower registrations than Tesla, BYD, and SAIC passenger cars, but higher than NIO, XPENG, and SAIC Volkswagen. Therefore, since resources are so valuable, the Shanghai government is more likely to offer opportunities to local vehicle manufacturing companies such as Tesla and SAIC Roewe, as these companies directly contribute to GDP, taxes, and employment opportunities for the city. Hence, in the foreseeable future, electric vehicle models, such as the Wuling Hong Guang MINI EV, BYD e1, ora Black Cat, NETA V, Chery Little Ant, LingPao T03, Changan BenBen EV, etc., will gradually fade out of first-tier cities.
Polices can be discussed and continuously improved after their implementation. However, for many customers who have just purchased their vehicles, the registration of new energy license plates in Shanghai has been suspended. This means that with the implementation of the new policies, they may no longer have the opportunity to apply for a free Shanghai license plate. Appropriate arrangements need to be made for this group of people by policy-makers.
A0-level and A00-level electric vehicles are still worth encouraging. For mega-cities in China, such as Shanghai and Beijing, which have relatively limited urban areas, it is necessary to limit A0-level and A00-level electric cars to ease traffic congestion. However, making a one-size-fits-all distinction simply based on price or size also has its limitations. Parking resources are tight in Shanghai, and A00-level electric vehicles have significant advantages and convenience in terms of battery consumption and parking. If a manufacturer can produce highly individualized and high-quality small cars, they still have a place in being encouraged and favored by policies. For example, Japan’s K-Car is still popular among all levels of Japanese society to this day.In cities beyond the first-tier cities, where there is more available space, we still need to encourage the consumption of A0 and A00 level electric vehicles. For China, the development of new energy vehicles can not only enable foreign car companies to surpass domestic car companies in terms of technology in this field and overcome the bottleneck of domestic car companies in terms of internal combustion engine technology, but also stabilize our energy supply and demand balance, further ensuring our energy security. And A0 and A00 level electric vehicles are more easily accepted by ordinary consumers due to their lower prices, which plays a role in energy conservation and emission reduction.
Restricting A0 and A00 level electric vehicles is actually a challenge for the policies issued by the Shanghai municipal government. If the restrictions are purely based on vehicle size, it will inevitably be seen as having a significant protectionist color and will not be conducive to fair competition in the entire market. Especially for electric cars produced locally in Shanghai, there is also a demand for entering the national market. The policy that Shanghai needs to formulate should encourage people to purchase pure electric models with more advanced technology and configuration, so that limited license resources become a tool to promote the technological upgrading of the Shanghai new energy vehicle market, and even the entire local vehicle market, making contributions to reducing Shanghai’s carbon emissions.
Policies always have ups and downs. In March of this year, the minutes of a meeting of the Ministry of Industry and Information Technology were published, clearly stating that four-wheeled low-speed electric vehicles will be incorporated into the low-speed pure electric passenger car standards. This means that the market for low-speed electric vehicles with considerable annual sales in China will be occupied by electric vehicles like the Wuling Hong Guang MINI EV. However, it is likely that a policy of the Shanghai municipal government will gradually force the Wuling Hong Guang MINI EV to withdraw from the first-tier and even second-tier city markets in the foreseeable future. However, A0 and A00 level electric vehicles will certainly have a place in China’s future new energy vehicle market. Developing pure electric vehicles according to local conditions and creating China’s national electric vehicle will be an unstoppable trend.
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.