From January to may 2020, there are two Chinese enterprises in the top ten enterprises in the world, with a total sales volume of 83000 vehicles, accounting for 11% of the total sales volume, down from 29% in 2019. Joint venture brands have gradually begun to develop new energy vehicles, and the market environment is becoming more and more fierce.

Expand production and increase efficiency joint venture brand to develop new energy market

According to the statistics of China Automobile Industry Association, from January to may 2020, the global sales of new energy vehicles totaled 747000, a year-on-year decrease of 12%, and the industrial scale declined for the first time. However, the market penetration rate of new energy vehicles is still growing, from 2.5% in 2019 to 2.9% in January may 2020.

1、 New energy vehicle market driven by joint venture brands

From January to may 2020, the total sales volume of new energy vehicles of the top ten enterprises in the world is 540000, with a market share of 72%. Among the top ten enterprises in the world, there are two Chinese enterprises with a total sales volume of 83000 vehicles, accounting for 11% of the total sales volume, down from 29% in 2019. There are six Chinese enterprises in the top ten in sales volume in 2018, but only two at present. The main reason is that joint venture brands have gradually started to develop new energy vehicles, and the market environment is becoming more and more fierce.

2、 FAW Toyota stepping up production and increasing efficiency

On June 29, 2020, the project commencement ceremony of FAW Toyota new energy branch was held in Tianjin Binhai New Area Central eco city, which means that FAW Toyota new energy project was officially launched, thus FAW Toyota entered a new era of transformation and expansion to new energy vehicles. The planned capacity of this new energy plant is 200000 vehicles, which will cover the complete production process including vehicle, battery, etc., and the total investment is expected to be nearly 8.5 billion yuan.

The launch of the new energy branch is also a sign of Toyota’s deepening development of electric vehicles in China. As early as December 18, 2017, Toyota announced its new energy vehicle challenge plan for 2020-2030. By 2030, Toyota will strive to achieve annual sales of more than 5.5 million electric vehicles in the global market, among which the annual sales of zero emission pure electric vehicles and fuel cell vehicles will strive to reach more than 1 million. It also said that starting from the Chinese market, it will accelerate the introduction of pure electric vehicles from 2020. Before 2025, the number of pure electric vehicles sold in the global market will be expanded to more than 10 kinds (after the Chinese market, Toyota will import pure electric vehicles in the order of Japan, India, the United States and Europe).

3、 SAIC Volkswagen increases production capacity of new energy vehicles

Chen Hong, Secretary of SAIC’s Party committee and chairman, said at the annual general meeting of shareholders of SAIC’s Listed Companies in 2019 that SAIC Volkswagen new energy plant will be completed and put into operation in October this year. It is understood that the first model put into production in the new factory will be SAIC Volkswagen ID.

SAIC Volkswagen New Energy Vehicle Factory is located in Anting, Shanghai, with a total investment of 17 billion yuan. It is planned to be completed and put into operation in October 2020, with a planned annual production capacity of 300000 vehicles. At present, among the single new energy production bases in the Chinese market, only SAIC Volkswagen and Geely have put into operation the “super factory” with an annual output of more than 300000 vehicles. SAIC Volkswagen once again stands in the first echelon in terms of scale.

4、 One third of FAW Volkswagen’s new cars in the future will be electric vehicles

FAW-VW car factory is one of the first batch of green factories in China. From factory planning to new or renovation projects, FAW-VW car promotes the comprehensive development of green products and green factories around the utilization efficiency of resources and energy and the level of cleaner production. In product research and development, FAW-VW has launched Golf pure electric, Bora pure electric, MAGOTAN PHEV and green factory into the market Tyron PHEV and other new energy vehicles.

With regard to the electric vehicles that FAW Volkswagen will launch around the world, in 2020, FAW Volkswagen will have a heavyweight electric vehicle product to be launched around the world. FAW Volkswagen plans to launch more than 30 new models in the next three years, more than one third of which will be electric vehicles.

5、 JAC Volkswagen takes small new energy vehicles as the breakthrough point

Jac Volkswagen was established in 2017, and has been acting frequently in the next three years. However, only Sihao e20x is available in its products. The capital increase of VW also shows the great potential of China’s new energy market.

In terms of business, JAC Volkswagen is greatly different from FAW-VW and saic-vw, and complements the former two in terms of products. In the future, small new energy models will be the entry point of JAC Volkswagen brand, which can be seen from the product line of Sihao brand. Sihao e20x, the first model, is a small SUV. Under such a positioning, JAC Volkswagen will open up new market segments and further enhance its market share and share.

In terms of planning, by 2025, JAC Volkswagen will have a product portfolio of 4-5 pure electric vehicles. Meanwhile, the R & D center already under construction will be promoted and completed by the end of 2020, thus completing the development strategy of the first stage of JAC Volkswagen joint venture.

6、 Volkswagen Group’s overall layout of new energy in China

On May 29, 2020, VW announced that it plans to invest 1 billion euro to acquire 50% shares of Anhui JAC Automobile Group Holding Co., Ltd., and increase its shareholding in electric vehicle joint venture JAC Volkswagen to 75%, so as to obtain the management right of the joint venture. At the same time, the enterprise will invest about 1.1 billion euro to obtain 26% shares of GuoXuan high tech, a battery manufacturer. The total investment of the above two projects is expected to be about 2 billion euro. Volkswagen has completed the layout of the domestic new energy industry chain at one stroke. It also makes Volkswagen group the first foreign-funded automobile company to directly invest in China’s battery manufacturing enterprises, making it deeply “tied” with the industrial chain.

In fact, the 2 billion euro is only a part of Volkswagen’s investment in new energy in China. Volkswagen has announced that it will invest 4 billion euros in China in 2020, 40% of which will be invested in the new energy field, and the original investment will not be “shrunk” by this investment. It means that in 2020 alone, Volkswagen will invest 3.6 billion euros in the new energy field, accounting for 60% of the total investment. This figure shows that Volkswagen attaches great importance to the new energy market. At the same time, large-scale capital investment will inject a “booster” into the development of domestic new energy vehicles.

Volkswagen’s choice to become a shareholder of GuoXuan high tech is based on various considerations. First of all, as a power battery supplier, GuoXuan high tech has strong R & D capability. At the same time, it also has good control over the supply chain of battery raw materials. After all, raw materials are the foundation of everything. The second GuoXuan high tech LFP chemical composition battery technology reserve is abundant, and LFP battery has the advantage of low cost, which coincides with the positioning of JAC Volkswagen small new energy products, which can better control the cost and price of vehicles. In addition, GuoXuan hi tech and JAC Volkswagen have geographical advantages, and they are also in Hefei, Anhui Province, with convenient logistics and efficient collaboration capabilities.

Volkswagen has a huge demand for power batteries. The Volkswagen Group plans to deliver 1.5 million new energy vehicles in China by 2025. The demand for battery capacity is unprecedented, which means that by 2025, Volkswagen will increase the demand for 100GWh power batteries. In such a big demand, battery supply is particularly important. At present, Ningde era is the main battery supplier of the first batch of MEB products. In the future, GuoXuan hi tech will play an important role, and its battery products will also be supplied to FAW Volkswagen and SAIC Volkswagen.

By taking a stake in Guoxuan High-Tech, Volkswagen can participate in the complete value chain of electric vehicle and battery cell production, and jointly strengthen the research and development work in the battery field, which is of vital significance for the implementation of Volkswagen’s electrification strategy, and also helps to realize the diversification of the battery supply chain, which is of great significance for further promoting the implementation of Volkswagen’s electrification strategy Strategic significance.