The prelude to the reshuffle of the new energy passenger car industry may open

The prologue of the new energy passenger car industry may be opened.

Recently, Hebei Yinlong, located in the Wu'an New Energy Industrial Park in Hebei Province, is experiencing a decline in orders and production stoppages. Yinlong has also experienced operational problems in several factories in other parts of the country.

In recent years, with the outbreak of the private car market, high-speed rail, intercity railways and subway lines have become more developed, and the passenger car industry has faced tremendous pressure to survive. With the improvement of the government's demand for the clean energy of public transport, the market for new energy passenger cars has ushered in major benefits. With the strong boost of the government, the local public transport market began to realize the replacement of traditional fuel trucks by new energy passenger cars.

Before 2016, the amount of subsidies for new energy passenger cars can be described as "amazing." An electric bus with 6 ≤ L(captain) <UNK> 8(M), the double subsidy of the central and local authorities is as high as 600,000 yuan, 8 ≤ L<UNK> 10(M) subsidy is as high as 800,000 yuan, and the subsidy of L ≥ 10m models is up to 1 million yuan.

"Although the cost of electric buses will increase, in fact, companies are already pricing much higher than the same fuel vehicles. With high government subsidies, much of this money is equivalent to being 'net earned' by companies." "A person in the passenger car industry once told the First Financial Reporter.

That is why the passenger car industry has seen such "outlandish" scenes, with public companies receiving far more than two or three times as much government subsidies as net profits. Take Yutong Bus(600066. SH), a leading enterprise in the industry, as an example. The net profit of Yutong passenger cars in 2015 was 3.535 billion yuan, a year-on-year increase of 35.31 %, but the current subsidies for the promotion and application of new energy vehicles were as high as 6.857 billion yuan, nearly double the net profit.

In 2016, Yutong Bus achieved revenue of 35.8 billion yuan, an increase of 15 % year-on-year, and the net profit of shareholders belonging to listed companies was 4.044 billion yuan, an increase of 14 % year-on-year. The company's new energy car subsidies for the current period amounted to 9.95 billion yuan, accounting for 53.1 % of the sales revenue of new energy vehicles, more than double the net profit. In addition, a number of bus listed companies include Zhongtong, Jinlong, and Ankai, and their performance is heavily dependent on government subsidies.

High government subsidies have led to a large number of passenger car companies, and some companies have even flooded into the new energy passenger car industry.

Due to the relatively extensive policy of subsidies for new energy passenger cars at that time, subsidies were completely based on the length of the models, and there was a lack of necessary "supervision" of vehicle delivery and operation. The passenger car industry was once the hardest hit area for "deception". After the punishment of several companies such as Jinlong Bus, Wanda Suzhoujimuxi, and Chen Yuyi, the government has re-combed and adjusted the subsidies for the new energy automotive industry. Subsidies for passenger cars are further refined and subsidized according to the amount of subsidy = vehicle charge × unit electricity subsidy standard × adjustment factor(adjustment coefficient: system energy density/charging rate/fuel saving level), At the same time, the ratio of Central and local subsidies to 1:1 was adjusted to 50 % of the central government. Not only that, the conditions for the application of 30,000 kilometers of operating mileage in the New Deal at the same time have become stricter after the supervision.

The policy adjustment allowed the entire passenger car market to "winter overnight." Yutong Bus's 2017 revenue dropped 7.33 % year-on-year; Net profit fell 22.62 % year-on-year to 3.129 billion yuan. On the one hand, the decline in subsidies has led to a decline in demand. On the other hand, the amount of subsidies has also been greatly reduced. The performance of passenger car companies represented by Yutong fell from the peak to the bottom. Not only that, because non-private vehicles must operate a mileage of 30,000 kilometers to apply for subsidies, to a certain extent, the company's repayment cycle has been extended, which has had a significant impact on the company's capital costs and accounts receivable. Yutong said in its 2017 financial report that its interest expenditure in 2017 was as high as 333 million yuan, an increase of 279.34 % from 88 million yuan in the same period last year; Provision for bad debts was $507 million, up 60.44 per cent from $316 million a year earlier.

Originally, the passenger car industry was a very low profit and high dependence on the government. As the industry leader, Yutong Passenger Car has many years of technological accumulation in the industry, and at the same time has rich experience in supply chain coordination. Such enterprises, with the support of the government's "tangible hands" aside, still face major problems. Moreover, latecomers such as Yin Long, who are relatively weak in the industry, must find a sound development path in the fluctuations of their policies. It is very difficult indeed.

Prior to this, Zhuhai Yinlong had proposed a target of 30,000 vehicles in production capacity and sales of 30 billion yuan in 2017. However, according to media reports, its sales volume was only about 7,000 vehicles last year, which is very different. In the context of declining subsidies and declining market demand, the suspension of work is undoubtedly a realistic choice.

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