Promotion of new energy vehicles requires dismantling of local protection fences

Premier Li Keqiang has presided over the executive meeting of the State Council a few days ago, demanding that "accelerate the development of energy-saving and environmental protection industries," and encourage the active participation of social capital, including private capital. Government official vehicles and buses should take the lead in promoting the use of new energy vehicles, and improve the supporting facilities synchronously. They also demand that the market share of energy efficient products account for 50% of the market in 2015. This time, Prime Minister Lee strongly advocated the use of new energy vehicles, revealing that the government may support the development of new energy vehicles even more strongly.

However, in the opinion of many people in the industry, for the current promotion of new energy vehicles, the barriers erected by “local protectionism” have become the biggest obstacle. In the automotive industry, local protection has a long history, which is closely related to the automotive industry chain length and high value of automotive products. The development and growth of automobile companies can not only bring jobs to local areas, but also bring huge taxes. Therefore, in the process of promoting new energy vehicles in non-producing areas, various forms of local protection barriers were encountered, which made the promotion work difficult and caused the current stagnation of the development of the new energy vehicle market.

At present, the four types of protection of the seedlings are the most typical:

First, because the subsidy for new energy vehicles is subsidized by the local finance for the production car companies, and the local fiscal revenue comes mostly from the taxation of local enterprises, this leads to the local government adopting the "fat water does not flow outside the field" approach, subsidies for new energy vehicles. The scope is limited to local companies and is not open to foreign car companies, making it difficult for many brands to enjoy local subsidies.

Second, some demonstration cities for new energy vehicles will use the “demonstration pilot” as a sign for attracting investment. You want to demonstrate your car here to me and invest in me. Some cities even proposed naked to build assembly plants there.

Third, some local governments have introduced some preferential and targeted institutional policies to protect local auto companies. For pure electric vehicles, if the battery capacity is greater than or equal to 15 kilowatt-hours, the country will be subsidized at 3,000 yuan/kWh. However, in some places, battery companies can produce larger-capacity batteries, so the local government will formulate some additional incentives for these companies.

Fourth, if there is no whole vehicle company but only the auto parts industry, the whole vehicle company that enters the local market will have to purchase local parts and components. However, some foreign vehicle manufacturers are distressed by the fact that many of the locally produced components such as batteries have not undergone rigorous testing. Even if they have been tested, the technical level is far from the requirements of the vehicle. Therefore, this also hinders the entry of some foreign companies.

Local protection is like a dividing wall, dividing a bright lobby into small pieces, creating a wall effect, which is impassable, impassible, and unsuitable. This kind of local protection has greatly reduced the demonstration effect and is extremely harmful to the development of the new energy automobile industry. At the same time there will be many drawbacks. Local protectionism will cause the current promotion of the use of new energy vehicles to become a political task, losing the ability of car companies to rely on the market to test whether their products are producing or selling. From the very beginning, local protection measures are adopted to promote the development of local auto companies, often protecting new energy vehicles with poor local technology, which is not conducive to the real cultivation of some large-scale backbone enterprises in the domestic new energy auto industry, and may lead to domestic new energy vehicles. The industry has embarked on the old but not strong old road of the auto industry.

Therefore, people in the industry strongly urge that the domestic new energy automobile industry urgently needs to remove the barriers of local protectionism and realize that free-selling of new energy vehicles is the same as traditional fuel vehicles. Only when the market is truly liberalized can we better demonstrate and expand the market size of new energy vehicles.

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