Policy helps accelerate the development of new energy vehicles

On the 14th, BYD, Aotexun, Luxiang shares, Desai batteries, power sources and other stocks related to new energy vehicles and lithium-ion battery concepts all came to a daily limit. This is mainly due to the "Notice on Further Doing a Pilot Work of Demonstration and Promotion of Energy-Saving and New Energy Vehicles" (hereinafter referred to as the "Notice") issued recently.

Ping Yu Securities analyst Yu Bing believes that the four ministries and commissions jointly issued a "notice" to clarify the direction of development of the new energy automotive industry in the next year, encourage infrastructure construction, eliminate local protection, will help the industry's healthy and sustainable development. However, when new energy vehicles can be scaled up to the streets, Yu Bing said that it is not easy to judge.

The “Notice” requires that all pilot cities actively study the restrictions on the implementation of new car licenses for auctions, shakes and restrictions on new energy vehicles, and introduce support policies such as parking fees, electricity prices, and road tolls. The notice requires that the subsidies for the vehicles manufacturing enterprises or users should not be delayed. The “accountability system” for pilot cities was also included in the notice. The pilot city that failed to pass the year-end review or the city that did not perform the work according to the relevant requirements was canceled.

The state has introduced four policies for energy-saving and new energy vehicles, but due to the lack of good organization and management, the effectiveness of implementation is greatly reduced. Northeast Securities analyst Liu Lixi reports that this notice has set clear requirements for the organization, planning, supervision, evaluation, and existing problems of policy implementation, which greatly contributes to guaranteeing the implementation of policies. The most noteworthy is the initiation of the "accountability system" for demonstrating and promoting pilot cities and enterprises. This brings substantial benefits to new energy vehicles and lithium battery concept stocks.

Sun Liping, an analyst at Huatai Securities, believes that the strength of local execution is usually the most critical factor for the effective implementation of a policy. As local auto industry is a very important source of revenue for the local government, support for new energy vehicles will inevitably be hindered by existing interests. The "accountability system" was included in the notice and assessment was conducted. Unqualified cities will lose their pilot qualifications, which means they will lose state subsidies.

But an auto analyst at a brokerage in Beijing said that from the above policy, more is aimed at Beijing than at the national level, because cars in other parts of the country do not have a limit. He believes that the most critical point for new energy vehicles is that the "New Energy Plan" can be quickly introduced, but it has not yet been introduced.

A listed company's executive secretary, whose share price is affected by the policy, said that at present, new energy vehicles are still subject to battery technology restrictions, and some of the company’s related businesses are currently only trial production.

Sun Liping believes that as one of the key means for the country to seize future important industrial fronts, new energy vehicles will continue to introduce practical and effective supportive policies. From a policy perspective, there are always positive benefits. However, it should be noted that due to the category of environmental protection and energy conservation, the actual profits of enterprises may be squeezed by the nature of public welfare. Therefore, the effectiveness of the full promotion of new energy vehicles and the actual profit contribution that enterprises can make in the later period remains to be seen.