Layout speed-up helps cost diversification New energy vehicle promotion is expected to accelerate


As Tesla’s counterattack in 2013 and China’s new energy auto policy continue to increase, related companies have accelerated their strategic layout in terms of technology and market. However, at present, China's new energy auto industry still has a one-sided dependency on policy support, especially financial subsidies, and its performance contribution still needs to take some time. Industry insiders expect that as the cost of technology development in 2014 will be diluted, new energy vehicles are expected to accelerate into the profit contribution period.

<br> <br> accelerate the new energy vehicles listed companies massing class point of view, BYD, Foton Motor, JAC minutes before the top three, full-year 2013 operating income reached 52.8 billion yuan, 34.1 billion yuan and 33.6 billion yuan In terms of net profit, Yutong Bus won the top spot with 1.8 billion yuan, followed by Jianghuai Automobile and Foton Motor.

In the first half of 2014, the new energy automobile industry may accelerate. BYD's new energy automotive industry is developing rapidly. The pure electric bus K9 and the plug-in hybrid "Qin" for individual consumers have achieved good sales this year, driving the Group's revenue growth and increasing profit contribution. Although the first quarter achieved a net profit of 11.96 million yuan, a sharp drop of 89% year-on-year, the company expects the first-half performance change will be between -18% to 14%, and the main driving force for the second-quarter earnings rebound is from new energy vehicles.

For the 2014 new energy automobile market, almost all car companies have given optimistic expectations. BYD believes that with the continuous deepening of government support policies, the development trend of new energy vehicles will be more clear, and the promotion speed of new energy vehicles is expected to accelerate significantly.

It is based on policy guidance that a number of car companies including SAIC and GAC will vigorously develop the new energy automotive industry this year.

Taking FAW Group as an example, the company stated that it will adopt the “three-step approach” to achieve the goal of becoming a leader in new energy vehicles: By 2016, it will initially form the industrialization capability of motors and battery systems and complete the commercial development of key models. By 2018, the realization of the scale and industrialization of new energy products will support the company's four-phase fuel limit target; by 2020, it will complete the preparation for the development of the entire series of models, with the capacity to release batches and occupy more than 15% of the market share in the country. Become the leader of China's new energy vehicles. BYD electric vehicles will also begin commercial operation of electric vehicles in Changsha, Xi’an, Shaoguan, Baoji and other places this year.

<br> <br> subsidies dependent on annual and quarterly reports also showed that new car prices energy dependence on subsidies is still large. Taking BYD as an example, the company achieved a net profit of 550 million yuan in 2013, a year-on-year increase of 579 percent. However, if the government subsidy is 677 million yuan, BYD will lose money.

In the first quarter of this year, BYD’s non-operating income exceeded 100 million yuan, a sharp increase of 90% year-on-year, and the surge in non-operating income of the company mainly came from government subsidies. In recent years, the company's subsidy red packets have mainly come from local governments. From 2007 to 2013, BYD has received RMB 870 million in automobile industry development funds from the Changsha Municipal Government, RMB 865 million in research and development activities of the Shenzhen Municipal Government’s automobile and auto parts, and Shaanxi Provincial Department of Finance and Information Industry Department 2.5 Billion-Yuan "Subsidy for New Plug-In Hybrid Vehicle (Qin) Technology Development Project". As the home base of BYD, Shenzhen has also launched a series of electric vehicle stimulation plans. From 2009 to 2015, the Shenzhen Municipal Government will provide 500 million yuan of new energy vehicles to promote matching funds each year. BYD will undoubtedly be the biggest beneficiary.

After removing the subsidy factors, from the quarterly report of listed companies, the performance of Zhongtong Bus and Wanxiang Qianchao achieved a substantial increase. Among them, Zhongtong Bus has the highest pre-increase rate. The company expects its net profit for the first quarter of this year to be more than RMB 180 million, an increase of over 1400%. The company stated that the new energy buses sold last year were mainly based in Shandong Province. With the gradual promotion of the government next year, the market scope will gradually be facing the whole country. While BYD, FAW Xiali, Founder Motors and other companies in the first quarter results showed a significant decline. Taking BYD as an example, the company expects to achieve a net profit of between 5 million yuan and 15 million yuan in January-March, a year-on-year drop of 90%.

Industry analysts said that with the gradual withdrawal of state subsidies, car companies will be more in the endogenous technological progress in the development of new energy vehicles. Judging from the current quarterly performance reports of a number of listed companies, performance is clearly divided. However, as a whole, new energy vehicles are expected to accelerate into the profit contribution period as the new energy vehicles of auto companies continue to put into operation and dilute the costs.


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