Author: Li Yuanyuan Dian Observer
At the end of March, a summary of the “Discussion on the Revision of Technical Conditions for Pure Electric Passenger Cars of China Automotive Research Institute” was circulated on the Internet.
Many people have spread the news that “old age mobility cars are finally going formal!” and “the new national standard for low-speed vehicles that has been waiting for ten years is about to be introduced!” It seems that the low-speed electric vehicle industry, which has been lonely for a long time, is about to usher in a second spring.
However, the fact is that this long-awaited policy is not good news for low-speed vehicle companies, nor has it brought significant changes.
Before the new national standard for low-speed vehicles was finalized, low-speed vehicle companies with stronger strength had already begun to upgrade and transform, entering the high-speed electric vehicle market or further sinking and launching micro electric vehicle models that are smaller and cheaper than traditional low-speed electric vehicles. And many low-speed car companies with insufficient strength have gone out of business in the previous rectification.
For the competent authorities, under the management direction of “upgrading one batch, standardizing one batch, and eliminating one batch” (hereinafter referred to as “three batches”), the elimination of one batch has basically been completed, the upgrading of one batch is in progress, and the standardization of one batch is about to complete the most important step-according to the plan, the new national standard will be officially released in September this year.
Afterwards, the competent authorities such as the National Development and Reform Commission, the Ministry of Industry and Information Technology, and the Ministry of Public Security will continue to manage low-speed electric vehicles that conform to the new national standard from the aspects of access policies, notice management, and road sign specifications, that is, the future micro low-speed pure electric passenger cars.
As the head of a low-speed vehicle company said, the attitude of various competent authorities towards the low-speed electric vehicle industry is not encouragement, but standardized management.
The market size of micro low-speed pure electric passenger cars after going formal will be much smaller than that of the original low-speed electric vehicles.
The New National Standard is Slightly Looser Than Expected
At the end of March, a summary of the Discussion on the Revision of Technical Conditions for Pure Electric Passenger Cars of China Automotive Research Institute was circulated on the Internet, revealing the contents of the new national standard for low-speed electric vehicles that was originally scheduled to seek opinions in April and May.
The “Electric Vehicle Observer” confirmed with multiple informants that the content of this meeting summary and the promotion time of the new national standard are basically true. After seeking opinions, it will enter the approval stage and is expected to be officially released in September 2021.
The new national standard for low-speed electric vehicles, which is about to be released, was actually established as early as 10 years ago. The competent authorities and relevant personnel in the industry have had many internal discussions during this period. A draft of the standard was also formulated, but it has not been officially published due to various reasons.
On March 26th, three days after the leaked meeting summary, an article was published by the China Automotive Technology Research Center on the WeChat public account of China Automotive News, titled “Revisions to ‘Technical Requirements for Pure Electric Passenger Cars’ Will Promote Further Regulation and Management of the Low-Speed Electric Vehicle Industry”. The article confirms that the country will no longer issue a separate standard for low-speed electric vehicles, but will add four-wheeled low-speed electric vehicles as a subclass of pure electric passenger cars based on the existing “Technical Requirements for Pure Electric Passenger Cars” (GB/T 28382-2012), and set indicators for body size, curb weight, maximum speed, and collision safety requirements.
According to the meeting summary, this new subclass is named “Micro Low-Speed Pure Electric Passenger Cars” and is defined as “having a driving energy provided by a power battery, with seating for 4 people or less, and a maximum speed of 40-70 km/h”. Some of the key indicators for this vehicle type include:
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Length, width, and height not exceeding 3500 * 1500 * 1700 mm, and a curb weight not exceeding 750 kg.
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Cancellation of trunk volume requirements.
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Adding collision safety requirements, with a requirement of 40 km/h for frontal collision tests, and side and rear collision requirements consistent with traditional cars.
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Relaxing the requirements for maximum driving speed and range, with a 30-minute maximum speed of 40-70 km/h, and no range requirement.
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Adding specific power requirements of 10-20 kW/t.
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Increasing the requirement for battery energy density to not be less than 70 wh/kg.
In addition, the newly defined micro low-speed pure electric passenger cars cannot be equipped with lead-acid batteries, and cannot obtain new energy vehicle score points. There are also corresponding regulations regarding tires, stability, starting acceleration performance, climbing performance, and low-temperature starting performance.
An executive at a leading low-speed car company told Electric Vehicle Observer that most of the indicators proposed in the new national standard had been mentioned in previous drafts and are generally in line with industry expectations. Especially the regulations on maximum speed, range, and climbing performance are even more relaxed than expected, making it easier for low-speed car companies to accept.
However, the relaxation of some standards may not necessarily mean a smoother transition for low-speed car companies, nor does it necessarily mean a rebirth of the low-speed vehicle industry.
“Eliminating a group”, basically completed
In fact, both the country and local governments have carried out several rounds of rectification for the uneven low-speed electric vehicle market.
Since November 2018, the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Public Security, and the State Administration for Market Regulation have jointly issued a notice on strengthening the management of low-speed electric vehicles, which set a 3-month deadline for investigating and rectifying low-speed electric vehicle production and sales enterprises, while strictly prohibiting the increase of production capacity of low-speed electric vehicles.
As a result, powerful low-speed electric vehicle enterprises accelerated their transformation and upgrading, while more weak ones lost their living space and disappeared. According to an industry insider’s estimate, under the strong rectification of various levels of regulatory departments, the current low-speed electric vehicle market has shown a significant shrinking trend, and the overall market size of low-speed electric vehicles may be only around 400-500 thousand in 2021. In 2017, only the production and sales volume of low-speed electric vehicles in Shandong Province exceeded 600,000.
In other words, the goal of “eliminating one batch” in the “three-batch” program has been basically achieved. The other two batches, including “upgrading one batch”, have already taken action. For example, veteran low-speed electric vehicle manufacturers such as Yujie, Reding, Fulu, and Jinpeng have acquired the qualification for producing new energy passenger cars through mergers and upgrades.
In 2018, Yujie launched a high-speed vehicle brand called Lingtu, and Reding also launched pure electric passenger car products such as i3 and i5 that can be registered. Reding’s recently launched Mango also advertised “green plate, no restriction”. However, so far, the products launched by low-speed vehicle companies after transformation and upgrading have not sold well in the registered market. In the whole year of 2020, no pure electric passenger car product from any low-speed vehicle enterprise has sold more than 1,000.
Now, with the new national standard about to be introduced, can Yujie, Reding and others take a step back, avoid the high-speed vehicle market that they are not familiar with, and produce mini low-speed pure electric passenger cars that comply with the new national standards? It seems difficult.
Therefore, transitioning from low-speed vehicle enterprises to mini low-speed pure electric passenger car enterprises belongs to the “regulated batch” that the regulatory authorities need to supervise. The minutes of the standard work conference made it clear that the new national standard adheres to the “three unchanged principles”: the thought of the “three batches” including “regulating one batch, eliminating one batch and upgrading one batch” by the State Council remains unchanged; safety requirements remain unchanged, and requirements are made for “low speed and small size” on the premise of not lowering the safety standards; the overall framework remains unchanged, still under the supervision of the Ministry of Industry and Information Technology, the Equipment Center, the Automotive Industry Association, the Ministry of Public Security, and the Ministry of Transportation.
There is also consensus among industry insiders, as the heads of the above-mentioned low-speed vehicle enterprises pointed out that the regulatory authorities’s introduction of new national standards for low-speed vehicles is not to encourage the development of this industry, but to further regulate and govern it.In their articles, two experts from the China Automotive Technology Research Center also pointed out that after the introduction of the new national standard, relevant departments can make the best use of the current motor vehicle management system to provide good guarantees for the standardization work in the next phase. At the same time, it provides a reasonable basis for local governments to carry out the work of cleaning up and rectifying, and also points out the direction for enterprises to develop standardized and compliant products.
Although from the feedback of low-speed vehicle companies, it doesn’t seem too difficult to meet the technical indicators of the new national standard, it’s not that simple to meet the management requirements for pure electric passenger cars.
First of all, according to the “Administrative Regulations on Investment in the Automobile Industry” published by the National Development and Reform Commission in December 2018, through restrictions on enterprises and local governments, the threshold for entry into the automotive industry has been raised. For micro low-speed pure electric passenger car companies that want to invest in new or expansion projects, the conditions are much stricter than before, when there was hardly any regulation for low-speed vehicle projects.
Secondly, in order to meet the conditions of new construction or expansion and successfully enter the Ministry of Industry and Information Technology’s automotive announcement, micro low-speed pure electric passenger cars must also accept the vehicle license plate management of the transportation department. In order to drive a micro low-speed pure electric passenger car, a driver’s license is required, but it’s not clear if the driver’s license requirements for driving a micro low-speed pure electric passenger car are the same as those for driving an ordinary pure electric passenger car.
An industry insider, Mr. Fang, analyzed that if the traffic management department only requires a Class D license for the driver of micro low-speed pure electric passenger cars, it may still retain about half of the market. However, if a Class C license is required, micro low-speed pure electric passenger cars will basically lose their entire market.
For the low-speed vehicle industry leader, to produce micro low-speed pure electric passenger cars, it’s not only necessary to face the rigorous record-filing and admission rules and bear the risk of losing traditional users due to driver’s license requirements, but also to invest in meeting the technical requirements of the new national standard, which is not cheap.
“Especially for low-speed pure electric passenger cars that meet the new national standard, there are no points, no exemption from purchase tax concessions, and no subsidies. Compared with Class A00 pure electric passenger cars, their competitiveness is weak. Because the sales price of low-speed electric vehicles in the past few years was already around 20,000 yuan, with a profit margin of only a few thousand yuan. To meet the new national standard, several thousand yuan of additional costs need to be added, which is already more than 20,000 yuan.
However, Class A00 pure electric passenger cars like Hongguang MINI EV have already lowered their prices to below 30,000 yuan. Plus, with the return of exemption from purchase tax and new energy vehicle credits, the cost effectiveness of Class A00 pure electric passenger cars is higher than that of new national standard low-speed pure electric passenger cars.”
Therefore, some companies may choose to continue upgrading and competing head-to-head with their competitors in the Class A00 pure electric passenger car market.
Other companies choose to continue to sink and launch smaller-sized and lower-priced electric vehicles than their original low-speed electric vehicles, i.e. “Weijiao” – low-speed electric vehicles with a length of about 3 meters, a width of about 1.5 meters, and a motor power as low as 3 kW or even 1.5 kW. This type of vehicle is not easy to be checked and even if it is seized, the loss is relatively small.
After years of waiting, the new national standard for low-speed electric vehicles is finally going to be released.
However, this belated document doesn’t bring too many changes to the low-speed vehicle industry. Those that should be eliminated have already been eliminated, those that want to upgrade will continue to move forward, and those that need to be regulated are adjusting their business strategies intensively. Only a few companies may continue to fight against the regulatory authorities in the gray area.
Anyway, after the new national standard is implemented, the regulatory authorities’ final step towards standardizing and managing the low-speed vehicle industry will be complete, and it will move towards the standardized management of high-speed vehicles.
The low-speed vehicle industry, which has undergone rapid development for several years, is still undergoing tremendous changes. With the addition of micro low-speed pure electric passenger car companies, the fiercely competitive A00-level pure electric market will become even more intense.
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.