Dual-point system escort new energy vehicles to increase production and sales growth

Author: ⊙ GF Securities

New target plan for charging stations by 2020 (Unit: seat)

Source: National Development and Reform Commission, GF Securities Development Research Center

New target planning for charging piles by 2020

(Unit: 10,000)

Source: National Development and Reform Commission, GF Securities Development Research Center

Total output and forecast of new energy vehicles

Source of data: China Automobile Association, Guangfa Securities Development Research Center

New energy vehicle total inventory and forecast

growth rate

Source of data: China Automobile Association, Guangfa Securities Development Research Center

The double-integration policy has guided the healthy development of the industry, and new energy vehicles have met the era of parity. The introduction of the double-point system shows that the relevant departments have gradually shifted from industry demand leaders to industry development leaders, providing power for new energy vehicles at the production end, and benefiting the leading companies in the industry. After calculation, considering the cost transfer caused by the integration policy, in the absence of subsidies, based on certain assumptions, it is expected that the full life cycle cost of electric vehicles will be lower than that of fuel vehicles by 2021, and the cost of electric vehicle purchases will be lower than that of fuel by 2025. Cars show economic advantages.

With the possible boom in charging piles around the world, equipment providers are expected to benefit first. According to calculations, the market size of the charging piles can reach 38.7 billion yuan in the next three years, and the profit growth of equipment manufacturers can be expected. In the medium and long term, the charging pile operation market is expected to become the next investment hot spot in the industry chain. Due to the policy overweight, short-term operators are expected to rely on subsidies to turn profit into losses, and as business models continue to innovate, value-added services continue to develop, and platform-based operations have achieved results, a group of outstanding operating companies are expected to come to the fore, and obtain lucrative benefits from the market.

Dual-point system for escorting new energy vehicles

On September 28, 2017, the "Measures for the Concurrent Management of the Average Fuel Consumption of New Passenger Cars and New Energy Vehicles" was promulgated and will come into effect on April 1, 2018. The key points of this approach are: assessment of fuel consumption points and new energy vehicle points, fuel consumption points are carried forward to the next year or transferred to affiliated companies, negative points for fuel consumption can be passed through transfer, affiliate transfer, and purchase of points for new energy vehicles. The new energy vehicle positive points can be sold externally, negative points can only purchase new energy vehicles positive points deduction. This means that even if the traditional car company has reached the fuel consumption standard for fuel-saving models (to obtain fuel consumption points), it must still subsidize the new energy vehicle companies (purchase new energy vehicles plus points), which will greatly enhance the vehicle manufacturers from the supply side. Production of new energy vehicles enthusiasm. The “Manual of the average fuel consumption of passenger vehicle companies and the management of new energy vehicle integration” has gone through three versions, namely the Interim Measures issued in September 2016, the consultation draft issued in June 2017, and the September 2017 release. The official version.

The official version still continues the policy guidance direction that encourages high mileage vehicles and high-energy-density batteries. The three-element line representing high energy density is expected to further increase penetration rate in passenger cars, three yuan high nickel and soft pack batteries, etc. Increasing energy density products is expected to be gradually introduced to the market. The integration standard of pure electric passenger cars replaces the integral calculation method of the step function by a continuous function, which greatly improves the precision of the integral calculation, and introduces the unit load quality power consumption standard to encourage the reduction of power consumption and further promote cleanliness.

In addition, for the fuel cell vehicle model change request draft, the driving mileage is used as the standard for dividing the integration level, and the system rated power index (proportional to the obtained points) is introduced, and the required driving range is not less than 300 km, further increasing the fuel consumption. Battery model threshold requirements. From the introduction of the double-point system, it can be seen that the relevant departments have gradually changed from industry demand leaders to industry development guides. Relevant departments no longer directly rely on administrative orders or subsidies to directly dominate industry demand. Instead, they rely on policies such as the double-point system as a macro tool to indirectly guide the development direction of the industry. The introduction of double points also shows that the general direction of the policy is to select the best and support the industry, leading the industry to take the "high energy density, high cruising mileage" technology development line.

Considering the cost transfer brought about by the integration policy, without subsidies, it is expected that the full life cycle cost of electric vehicles will be lower than that of fuel vehicles by 2021. By 2025, the cost of electric vehicle purchases will be lower than that of fuel vehicles, and economic advantages will emerge. For the entire industry, if you do not consider the transfer of fuel consumption points between related companies, you can calculate the 2016 industry fuel consumption negative points as 1.54 million points. If it is assumed that there are sufficient transfers within the associated company, you can calculate the negative points for the fuel consumption of the industry. 615,000, the actual situation should be somewhere in between.

According to our calculations, from 2018 to 2020, the negative points of fuel consumption that need to be compensated after the fuel consumption points are fully transferred are approximately 950,000 points, 1.47 million points, and 2.5 million points. Combined with the requirements for new energy points, the new energy points required in 2019 and 2020 will be 2.75 million and 3.44 million points respectively. From 2018 to 2020, the annual new energy points that need to be met are 950,000 points, 4.22 million points, and 5.94 million points. For example, if you calculate the average new energy car mileage by 3 points on a bicycle, you need to double-credit the points from 2018 to 2020. The output of new energy passenger vehicles is about 320,000, 1.41 million, and 1.98 million.

National policy to optimize short-term growth can be expected

We expect that sales of new energy passenger vehicles will increase by 45% to 60% and reach 800,000 units in 2018. Sales of new energy buses and special vehicles will still maintain a level of about 200,000 vehicles, which will drive sales of new energy vehicles throughout the year. It reached about 1.1 million. Affected by the increase in the average charge capacity of passenger vehicles, it is expected that the overall battery consumption will still increase by around 30%.

At the same time as the country's subsidy is being withdrawn, there may also be adjustment actions for the future. The new version of the policy clearly defines that local subsidies for subsidized purchases will gradually be transferred from 2018 to support the construction and operation of charging infrastructure, and the use and operation of new energy vehicles. In license-restricted cities, the attractiveness of license plates is greater than the attractiveness of subsidies, and consumer groups are relatively less sensitive to prices. Subsidy withdrawal has little effect on the demand for new energy passenger vehicles. In addition, the subsidy will be used to retreat, or to use this part of the funds for the construction of charging piles, etc., to further facilitate the practical use of new energy vehicles and promote the willingness to use new energy vehicles.

Passenger car and special vehicle production and sales are bullish

Limited city crowding effect, demand for passenger vehicles has steadily increased. Influenced by the crowded out effect of restricted cities, the demand for personal new energy vehicles just needed for licenses will continue to grow steadily. At present, the promotion of new energy passenger vehicles in the area of ​​individual consumers is mainly driven by license dividends, and sales are mainly concentrated in first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen.

The economic advantage of linkage policy support, taxi electric space is vast. The taxi market is an important segment of growth in the next few years. Compared with ordinary automobiles, new energy vehicles are more expensive to purchase, but they are less expensive to use and simple to maintain. Due to the government's encouragement for public transportation, the direction of superposition of the new energy automobile industry remains unchanged, and taxi electrification is an important policy guiding direction. Vehicles from 300 km to 350 km will be the main replacement for large-scale urban operation vehicles.

Buses are dominated by administrative procurement, and rigid demand has become an important factor in the stability of sales. New energy buses are mainly based on administrative procurement, and users are less sensitive to price. It is expected that in the context of subsidy withdrawal, the sales volume will remain stable in the future. The electrification of buses is a general trend. The "Thirteenth Five-Year Plan" for urban public transport development outlines clearly that by 2020, in the urban public transport field, the number of new energy vehicles will reach 200,000, and the "New Energy Bus Promotion and Application Assessment Method (Trial)" will also put forward The requirements for the assessment of the effectiveness of new energy vehicle public transportation promotion.

The new energy special vehicles have low penetration rate and the future growth may be delayed. According to the data from the Ministry of Transport, in 2016, China's express delivery volume reached 31.183 billion, an increase of 51.4% over the previous year. Electric logistics vehicles are mainly used in the field of logistics terminal distribution. With the increase of terminal single-batch delivery volume and implementation of the “forbidden to limit electricity and electricity” regulations, considering the low penetration rate of electric logistics vehicles, there is ample room for growth in the future.

The incentives of the double-integration policy on the supply side and the growing internal demand for new energy passenger vehicles, passenger cars and special vehicles have driven the sustained and steady growth of the total amount of new energy vehicles. Overall, sales in the year 2018 are still expected to increase rapidly. The annual production and sales volume of 1.1 million vehicles is expected to reach, which will result in a 30% increase in battery consumption. In 2019, the credit system began to be implemented, and a large number of consumer-grade new energy models emerged, and the sales growth rate increased. According to our calculations, it is expected that the output of new energy vehicles in China from 2018 to 2020 will reach 1.1 million, 1.586 million, and 2.332 million.

Cobalt: price and price increase, supply and demand tight, bring high prosperity

In terms of demand, the steady growth of the 3C battery field and the outbreak of the ternary battery stimulated the rising demand for cobalt in the upper reaches. According to our estimation, China’s ternary battery demand will reach 18.02Gwh, 29.59Gwh, 45.52Gwh, and 70.48Gw from 2017 to 2020, with an average annual compound growth rate of 41%. As an important raw material for the ternary cathode, cobalt is The demand will continue to flourish.

On the supply side: The supply elasticity is low, and the supply and demand gap is expected to come. In the current market situation, cobalt supply is effectively controlled. Cobalt is a relatively rare metal that is fairly unevenly distributed throughout the world. According to USGS estimates, in 2016, the global cobalt reserves were about 7 million tons, Congo (Gold) had 48.57% of the cobalt reserves, and China's reserves accounted for only 1.14% of the world. At the same time, cobalt production was highly concentrated in Glencore, Vale and other international giants. In 2016, the world’s top 10 cobalt producers accounted for 69% of the total output, with Glencore alone accounting for 23%. Under this pattern, the production giant has strong bargaining power in the global cobalt market due to its effective control over supply, and cobalt supply flexibility remains low.

In addition, the low prices of copper and nickel have affected the release of new cobalt supply. Cobalt is associated with copper, nickel and other minerals. In recent years, the prices of copper and nickel have been relatively low. The lower profits have directly affected the enthusiasm of the relevant enterprises in increasing production and the development of new mines. As a result, the short-term growth of new cobalt supply has been limited.

It is estimated that by 2020, with the high-nickel ternary large-scale application, the downstream manufacturers can withstand the cobalt price will exceed 800,000 yuan / ton, and the material cost will account for more than 90% of the total cost of the ternary anode. Demand side growth is strong, supply side growth is slow, and the high nickel ternary process has accelerated the release of price elasticity. We expect the probability of cobalt price rise in 2018 is greater.

Lithium Carbonate: The Coexistence of Danger and Machine Lithium Prices Gradually Stabilized

Supply side: Under the background that the price of lithium carbonate continued to rise this year and lithium extraction technology from salt lakes has gradually made breakthroughs, most of the major lithium companies in salt lakes at home and abroad have formulated expansion plans. According to the capacity planning of mainstream lithium lakes, it is estimated that by 2020, 200,000 tons of salt lake lithium will be put into production. At the same time, it is worth noting that, in 2013, the market also had concerns about the supply of lithium in domestic salt lakes and the oversupply of lithium carbonate in China. However, according to Wind's statistics, China's lithium carbonate production only increased from 38,000 tons in 2013 to 40,700 tons in 2014, and then to 42,000 tons in 2015, there was no large-scale production capacity that was previously worried Release status. Based on the above factors, we infer that the future supply of lithium carbonate will continue to maintain steady growth, it is difficult to significantly expand, and the actual release effect of lithium production capacity in the future of salt lake remains to be seen.

Demand side: Comprehensive acceleration of vehicle production and active battery de-stocking, we believe that the current power battery inventory has been better alleviated, and the future growth of the entire downstream vehicle production and sales will be expected to bring power battery industry production recovery and production. Growth, and the increase in demand for lithium carbonate. We believe that new supply of lithium carbonate will grow relatively stable in 2018, and production will maintain steady growth. At the same time, the pressure on battery inventory has been better relieved. Under the impetus of the recovery of downstream new energy vehicles, we expect lithium carbonate prices to be expected to gradually increase in 2018. Steady recovery.

Charging pile: policy support to increase or usher in investment boom

A complete charging infrastructure system is an important guarantee for the popularization of electric vehicles, and the support policies of relevant departments have been continuously introduced. In 2018, the government’s subsidy policy made it clear that the local supplements will be gradually transferred to support the construction and operation of basic charging facilities. As early as in October 2015, the “Guidance on Accelerating the Charging of Electric Vehicles” was issued by the State Council in 2020. In 2005, we basically built an intelligent and efficient charging infrastructure system with appropriate advancement, car piles, and follow-up. According to statistics from the Charging Federation, as of November 2017, a total of 205,000 public charging poles and 199,000 private charging poles have been built nationwide, totaling 404,000, with a considerable growth potential.

According to our forecast, the market size of the charging piles can reach 38.7 billion yuan in the next three years, and the profit growth of equipment manufacturers can be expected. According to the results of the three batches of tenders of the State Grid in 2017, the total number of DC charging equipments of the successful bidders is not far behind. XJ Electric, with the largest number of successful bidders, accounted for only 8.29%. The top five companies that won the bid were only 30.85%, and the companies with the lowest number of successful bids accounted for 6.17%. At the same time, a total of 5,916 sets of AC charging equipment were tendered by the State Grid Corporation of China this year. XJ Electric, Guodian NARI, Beijing Huashang and other three companies shared the total tender amount. However, taking into account that the price of a single set of AC charging equipment is less than one tenth of the price of a single set of DC charging equipment, the successful outcome of AC piles does not change the overall competitive landscape.

The downward price of charging equipment has boosted the investment enthusiasm of operators, which is conducive to further opening up market demand. The constant bullish market attracts new players to enter the market one after another. Under the increasingly fierce market competition, the price of charging equipment is gradually adjusted downwards. At the same time, Huawei and other companies with strong technical reserves and R&D capabilities have entered the field of charging modules, or further reduced the production costs of DC piles, which in turn drove down the price of DC piles. At the same time, under the policy of increasing support for charging piles, the reduction in equipment prices has also led to a reduction in the construction cost of charging pile operators and a wider profit margin, which has helped boost operators’ investment enthusiasm and helped to further open up the market demand for equipment. .

Charging piles long-term hope for innovation in business model

Charging pile operation industry is still in its infancy. Due to the high investment cost in the early stage of the charging station construction, the lack of a scientific construction layout for some charging pile operators, the low utilization rate of the charging piles, and the unclear profit model of the operators, it is difficult for the company to make profits at this stage.

Currently, there are many participants in the market for charging piles, and the overall competitive landscape is scattered. The market has great potential. According to statistics from the Charging Federation, as of the end of November 2017, the number of charging piles owned by State Grid Corporation, Star Charging, China Putian, and SAIC An Yue was among the top domestic operators, and the number exceeded 6,000. Although the number of charging piles owned by operators is quite different, because the construction of charging piles in our country has just started, the size of charging piles owned by each company is still far from the planned target of 4.8 million in 2020. The market has huge potential space.

It is expected that with the continuous increase of new energy vehicle ownership and the gradual acceleration of the marketization process, the competition in the charging operation market will become increasingly fierce, and the future industry reshuffle will be inevitable. In the end, a few large-scale platform operators will form a dominant position. A large number of small and medium-sized operators will adhere to the industrial ecology pattern of a large platform. Operators relying on charging networks, Internet of Things, transportation networks, and the Internet will be more likely to stand out.

The double-integration policy has guided the healthy development of the industry, and new energy vehicles usher in the era of parity. The introduction of the double-point system shows that the relevant departments have gradually shifted from industry demand leaders to industry development leaders, providing power for new energy vehicles at the production end, and benefiting the leading companies in the industry. After calculation, considering the cost transfer caused by the integration policy, in the absence of subsidies, based on certain assumptions, it is expected that the full life cycle cost of electric vehicles will be lower than that of fuel vehicles by 2021, and the cost of electric vehicle purchases will be lower than that of fuel by 2025. Cars show economic advantages. We believe that the 2018 subsidy retreat will not change the general trend of growth of new energy vehicles. The demand for various types of vehicles is guaranteed, and the long-term outlook for the new energy auto sector is firmly established.

Upstream: Cobalt is still the focus of lithium to see prices and valuations

As far as cobalt is concerned, policies have led new energy vehicles to increase their energy density and high cruising range, driving the demand for Sanyuan batteries to continue to rise. As an important raw material for the ternary cathode, cobalt demand is expected to continue to flourish in the future. Under the tight supply and demand pattern, we expect the future price of cobalt will remain firm.

As far as lithium is concerned, taking into account the buffering period for the first half of 2018 adjusted by the country's subsidies, the factor that the downstream companies actively reduced production and inventory in the fourth quarter of 2017 was added. Last year, the higher power battery inventory has been better relieved. This year, the increase in production and sales volume of downstream vehicles is expected to bring about production recovery and output growth in the power battery industry and bring about an increase in the demand for lithium carbonate.

On the supply side, based on the statistics of the domestic and international major Lithium-producing lithium company's expansion plans, we conclude that the lithium carbonate supply end will maintain a stable growth in 2018, and it will be difficult to increase in the short term. The actual release effect of lithium extraction capacity from the salt lake in the future will remain. to be observed. Under the impetus of downstream demand, we expect lithium carbonate prices to gradually stabilize and recover in 2018. It is recommended to pay attention to the relevant standards in the lithium and cobalt industry and pay attention to the vertical and vertical technology of the ternary cobalt precursor.

Downstream: policy plus charging pile is expected to usher in construction boom

We believe that the continued growth of new energy vehicles and strengthened policy support will become the main drivers for the future growth of the charging pile industry. Specifically, according to the goal of building 4.8 million charging piles by 2020, the construction plans and preferential policies for charging piles of related departments in various regions have been gradually introduced. The adjustment of the ground compensation is tilted from the purchase side to the charging pile construction and operation end, which is to boost the charging piles. The main policy factors in the industry's upside. The current 4:1 car pile is more than the addition of new energy vehicles, and the urgent need for supporting the construction of charging piles is the fundamental driving force for the continued upward growth of the industry.

In the short term, equipment providers are expected to benefit first, with the potential for possible future charging pile construction. According to calculations, the market size of the charging piles can reach 38.7 billion yuan in the next three years, and the profit growth of equipment manufacturers can be expected. In the medium and long term, the charging pile operation market is expected to become the next investment hot spot in the industry chain. Due to the policy overweight, short-term operators are expected to rely on subsidies to turn profit into losses, and as business models continue to innovate, value-added services continue to develop, and platform-based operations have achieved results, a group of outstanding operating companies are expected to come to the fore, and obtain lucrative benefits from the market. Related companies: Kingpin Electric, KSTAR, etc., core manufacturers of charging pile equipment;

Midstream: Subsidy downgrade focus on mid-stream prospects

From the demand side, we believe that the subsidies adjustment in 2018 will not change the growth trend of production and sales of new energy vehicles, so the overall demand for batteries and battery materials in the middle reaches will continue to decrease.

In terms of batteries, the downward price has made the market increasingly fierce. Large-scale battery companies bind downstream high-quality vehicle customers, especially the A-class passenger car supply chain. With the growth of production and sales of passenger vehicles, the company will expand production in an orderly fashion to meet customer needs. The competitive landscape of the strong and permanent strong has become increasingly prominent.

The competitive pattern of ternary materials is relatively loose. The upstream cooperation arrangement of third-party positive enterprises will help to create cost advantages and maintain profitability. At the same time, binding downstream battery customers to gain market share will achieve greater performance growth. At the same time, high-nickel triple terns are in line with policy guidance, and companies that prioritize high-nickel triple terns will gain first-mover advantage.

In the field of diaphragms, the cost performance of dry diaphragms is highlighted. In the downward trend of the battery pack price, the battery factory was forced to seek cost reduction through profitability pressure, and the gap between the dry and wet coating separators continued to maintain a relatively high level. The cost-effectiveness of dry diaphragms was highlighted, and some leading battery manufacturers had begun to switch back. Use a dry diaphragm. At the same time, we are optimistic about the development momentum of new energy auto parts. New energy vehicles are different from the main components of traditional fuel vehicles and their cost structure has led to the outbreak of demand for related auto parts. Related companies: The middle stream is optimistic about batteries, dry diaphragms and electrolyte leader Guoxuan Hi-tech and Tianci materials, concerned about the source material; at the same time continue to focus on automotive electronics and other fields.

Source: Shanghai Securities News, China Securities Network