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The Countdown of Fuel Vehicles: Will They Be Banned in the Near Future?

Lamborghini recently sold its last internal combustion engine sports car. “All orders for Huracan and Urus have been closed, and orders for these two models are no longer accepted.” The supercar brand under the Volkswagen Group announced in early July.

For more than a hundred years, fuel vehicles have been the “pearls” of the automobile industry. But under the wave of electrification, even supercar brands are “sentenced to death” for fuel vehicles. This means that no matter how rich consumers are, they will not be able to buy pure fuel vehicles from Lamborghini in the future.

Not only that, but in the past year, more and more traditional car companies have announced when they will stop producing fuel vehicles. In mid-July, Dongfeng Honda announced that the proportion of electrification will reach more than 50% by 2025, and no new fuel vehicles will be launched after 2027; BYD, GAC, Great Wall, Changan, etc. have also announced the timetable for the discontinuation of fuel vehicles.

Even though fuel vehicles are enthusiastically pursued by some enthusiasts, it seems that it cannot stop the determination of car companies to transform into electrification. With the market demand still in place, why do more and more car companies issue “critical illness notices” to fuel vehicles in advance? Does this mean that the “countdown” of fuel vehicles will be faster than the public expected?

“I don’t understand why people still buy gas cars. They buy gas cars because they are so nostalgic.” Buying a fuel car is like buying a functional machine in the era of smartphones.” In recent years, the heads of new car manufacturers have continuously launched attacks on traditional fuel cars.

Judging from the data, sales of new energy vehicles continue to rise in China. In the first half of 2023, the production and sales of new energy vehicles in my country reached 3.788 million and 3.747 million respectively, a year-on-year increase of 42.4% and 44.1% respectively, with a market share of 28.3%. The “New Energy Vehicle Industry Development Plan (2021-2035 Year)” put forward the 2025 development goals.

The tide of electric vehicles is rewriting the rules of competition in the auto market, and traditional car companies have to follow suit. As early as March 2022, BYD had stopped the production of fuel vehicles; GAC Group initially planned to stop producing pure fuel vehicles by 2025; by 2028, it would no longer sell pure fuel vehicles ; In 2017, Changan Automobile announced that it would completely stop the sale of traditional fuel vehicles in 2025.

The rapid progress of domestic new energy vehicles is also regarded as a threat overseas. “We need to manufacture more electric vehicles quickly. China has launched more than 80 electric models globally, and we must follow up. We cannot leave this critical industry to others.” European Commission Vice-President Frans Timmermans made the call in the European Parliament.

On February 14, the European Parliament in Strasbourg passed the 2035 European proposal to stop the sale of fuel engine vehicles with 340 votes in favor, 279 votes against and 21 abstentions, in order to accelerate the transition to electric vehicles. In other words, vehicles with engines cannot be sold in 27 countries in Europe, including HEVs, PHEVs and extended-range electric vehicles.

“From a macro perspective, the dual carbon goals of carbon neutrality and carbon peaking have become an irreversible trend. Countries in Europe, America, Japan, and South Korea have set a deadline for 2035, that is, within this year, Europe, the United States, Japan, and South Korea will either no longer produce fuel vehicles. , or exhaust emissions must be zero. Frankly speaking, the deadlines for fuel vehicles in these countries are not radical.” said Zhang Hong, secretary-general of the New Energy Branch of the China Automobile Dealers Association.

It may only be a matter of time before car companies stop producing fuel vehicles. Volkswagen said it will withdraw from the European internal combustion engine market between 2033 and 2035; Audi plans to launch only pure electric vehicles from 2026; Nissan will stop developing new internal combustion engines in all regions except the United States. Hyundai, the representative of Korean cars, announced the closure of the internal combustion engine R&D center. Most of them reorganized into electric vehicle R&D teams, and a small number continued to provide technical services and optimization for existing internal combustion engines.

Unlike the European Union’s “one size fits all” approach to fuel vehicles, China has a certain tolerance for hybrid models, and has not clearly issued a specific timetable for banning the sale of fuel vehicles . In recent years, competent authorities or experts have repeatedly stated that they will study the timetable for banning the sale of fuel vehicles, which will immediately cause huge controversy. The public’s doubt is that as long as the problems of inconvenient charging and high cost are not fundamentally resolved, it is unrealistic to ban the sale of fuel vehicles.

Fuel vehicles are losing consumers

In China, pure electric vehicles are still unable to carry the burden, but pure fuel vehicles are losing consumers. In 2022, compared with 5.674 million new energy vehicle sales, a net increase of 2.687 million units year-on-year, and 14.868 million fuel vehicle sales, a year-on-year decrease of 2.302 million units. Although there are still many disadvantages of electric vehicles, consumers have to accept the fact that there will be fewer and fewer pure fuel vehicles in the future.

The first to bear the brunt is the overcapacity of fuel vehicles of traditional car companies. According to data from the Passenger Passenger Association, as of the end of 2022, the total production capacity of the TOP20 auto companies will be 37.49 million vehicles, accounting for nearly 90% of the total, but the overall utilization rate is less than 50%. Among them, Geely, Great Wall, SAIC Volkswagen, Changan Ford , Beijing Hyundai, Yueda Kia and other car companies with a large proportion of fuel vehicles have a capacity utilization rate of less than 40%.

“Changan Ford cut production capacity by one million”, “GAC Mitsubishi Changsha plant stopped production for several months”, “Volkswagen and GM’s traditional car production capacity in China may be idled by 1/3 by 2030″… This year, such news has been seen frequently.

Greenpeace (Greenpeace) released a report a few days ago, saying that if new energy vehicles account for 40% of total new car sales by 2030, then one-third of ten mainstream car companies such as Volkswagen, Toyota and General Motors will 100% of internal combustion engine vehicle production capacity may eventually be idled.

According to data released by the National Passenger Car Market Information Association, in June 2023, 35.1% of the retail sales of new passenger cars in China will be new energy vehicles, while new energy vehicles will only account for 3.7% of the sales of mainstream joint venture brands.

The German, Japanese and American brands that used to dominate the Chinese market are no longer popular. For example, in terms of German cars, from January to June this year, North and South Volkswagen has lost the number one sales position in the country.

Recently, SAIC Volkswagen’s three OEMs in Anting are undergoing production line adjustments: the first factory (founded in 1984) is permanently closed, and some production lines are relocated to Yizheng, Jiangsu; the second factory (founded in 1992) Start the combined shift and merge the two production shifts into one shift; there is a high probability that the third factory will also start the combined shift in the second half of this year. The purpose of this adjustment is to move the fuel vehicles whose demand has weakened to the base outside Shanghai, and the Anting base to switch to the production of new energy vehicles.

In terms of American cars, SAIC-GM ranked 7th with a drop of more than two digits; Japanese-branded GAC Toyota fell out of the top five in the half-year sales list, while Dongfeng Honda and Guangqi Honda were nowhere in the top ten of the Chinese auto market.

In addition to the dual-carbon goal of carbon neutrality and carbon peaking, Tesla ‘s pressing step by step is the death knell for fuel vehicles. Representatives of Tesla will meet with India’s commerce minister this month to discuss plans to build a factory to produce “new cars with a target price of 2 million Indian rupees (about 150,000 yuan),” the people said. Tesla has expressed interest in building a factory in India to produce low-cost electric vehicles for the local market and for export, the person said.

In fact, the wave of price cuts led by Tesla at the beginning of this year has completely driven domestic new energy vehicle companies to follow up, and this phenomenon has further narrowed the price gap between new energy vehicles and traditional fuel vehicles, further exacerbating the pressure on the fuel vehicle market. shrinking. The overall price reduction of new energy is a great benefit for consumers, but for fuel vehicles, it may also be a straw that crushes the camel’s back.

Although Tesla’s specific plan and launch date for the Model 2 have not yet been announced, and the launch date of the 150,000-yuan Tesla is still a mystery, industry insiders estimate that it will not exceed 3 years (2027) at most. Car companies will suffer a lot in the market.

At the recently held 2023 China Automobile Chongqing Forum, many heads of automobile companies predicted the penetration rate of new energy vehicles in the Chinese market in 2030. Yin Tongyue, chairman of Chery Automobile, was the most conservative. He thought it was about 70 % . The figure given by chief engineer Ma Donghui is above 95%. S&P Global Automotive Powertrain and Compliance Senior Analyst Zhang Wenjuan’s previous judgment was 55%.

Let consumers choose

Although the trend is irreversible, many car companies have announced that they will stop selling fuel vehicles, but this does not mean that fuel vehicles will completely enter the history museum.

The main reasons are: 1. The current new energy vehicle technology is immature, and the biggest short-board battery problem has not been solved. After the car is on the high speed or in winter, the travel efficiency is reduced, and it is often “500 battery life instead of 250 driving”. From the perspective of use, electric vehicles cannot meet the needs of all families.

2. The current competitiveness of pure electric vehicles is not completely real. There are many supporting policies behind them, such as exemption from purchase tax, and licenses can be obtained for free in some regions. However, with the increase in the number of trams, these policies will most likely be withdrawn in the near future. Cui Dongshu, secretary-general of the Passenger Car Joint Conference, had put forward the proposal of “merging blue and green cards” before, only then can the competitiveness and market positioning of new energy vehicles be truly seen.

3. Although the development of new energy vehicles is booming, looking at the mainstream new energy vehicle companies in the world, only Tesla and BYD can make profits. one car.

Under the pressure of electrification transformation and profitability, a more realistic response for traditional car companies is to hybridize as soon as possible.

BYD has solved people’s travel problems by launching the “DM-i” hybrid technology – pure electric power for short distances and hybrid power for long distances. Like the DM-i 2023 champion version of BYD Qin PLUS, the price can be as low as the original fuel model. The effect achieved is also remarkable. In 2022, the sales of BYD’s plug-in hybrid models will increase by 247% year-on-year, much higher than the 184% of pure electric models.

Similarly, Ideal currently has a single product line, only SUVs, no cars, only extended range, and no pure electric vehicles. However, in the past Q2 of 2023, the delivery volume of Ideal cars reached 86,500 units, which is more than that of Weilai + Xiaopeng. and nearly twice as high.

Zhu Huarong, chairman of Changan Automobile, once judged at the 2022 World New Energy Vehicle Conference that “China’s auto industry has initially met the conditions for stopping the sale of fuel vehicles, and stopping the sale of fuel vehicles can be included in the research agenda.” But he quickly added: ” Plug-in hybridization and range extension must continue, and we can study the discontinuation of pure fuel vehicles.”

As long as the “big future trend” is pure electric vehicles, let consumers choose by themselves. As far as car companies are concerned, business and interests are behind them. They are more inclined to ban fuel vehicles instead of banning “fuel tanks” and keep hybrid/extended range vehicles. There is room for transformation.

Of course, as long as charging is convenient, pure electric vehicles still have obvious advantages. The cost of using electric vehicles is cheaper than that of fuel vehicles. The driving experience is convenient and comfortable, and it is naturally compatible with intelligent functions. Consumers will also tend to buy pure electric vehicles with better intelligent experience.

In short, it must be a long and gradual process for new energy vehicles to defeat fuel vehicles in terms of sales and replace them. The quality of a product must be verified by the market itself. Fuel vehicles should not end in policies, but should be handed over to the market and follow the personal choices of consumers.

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