Wei Anli: Thoughts and suggestions on the triggers of car price reductions


Wei Anli


After the sudden opening of the domestic automobile sales market swept the country, many media friends called to discuss their views, but did not speak at that time. Later, I thought that it was better to write and say it myself, which could play a warning role, and it was considered that the time to climb the grid was not wasted.


At present, there are three main views on the trigger of the automobile price reduction tide, and the author believes that none of them are appropriate.


One of the triggers: the grand strategy of dumping fuel vehicles.


Those who hold this view believe that this is a echo of car companies in the lower reaches of the Yangtze River, and Mr. Zhu Huarong said at a meeting in 2022 that "China's auto industry has initially met the conditions for stopping the sale of fuel vehicles, and the suspension of fuel vehicles can be included in the research agenda." and "80% of China's fuel vehicle brands will 'shut down and turn' in 3-5 years", the two views were officially put into action, and the grand strategy of selling and abandoning fuel vehicles was launched.


The author does not agree that this is the trigger.


First, "China's automobile industry has initially met the conditions for stopping the sale of fuel vehicles, and the suspension of fuel vehicles can be included in the research agenda." and "80% of China's fuel vehicle brands will be 'shut down and turned' in 3-5 years" are not in line with China's national conditions;


Second, the research and development goals of the vast majority of Chinese car companies and their engineers and technicians still have not left fuel vehicles;


Third, compared with the overall goals of energy transformation, industrial upgrading and achieving high-quality development advocated by the state, the above two views have no basis and no market positioning.


Trigger 2: Liquidation of inventory.


This is even more nonsense. The healthy development of China's automotive industry has long been rid of the past era of not asking about market demand, focusing only on mass production, and simply pursuing output value. The industry has established a complete industrial chain and supply chain supported by big data, and in terms of determining the production cycle, the preparation system of each car company to sell and determine production is very perfect, and there is no large amount of inventory that many people say needs to be cleaned up.


If it is the task and goal of local governments to complete GDP targets, promote consumption and drive domestic demand, the contribution that car price reduction sales can provide is not as great as many people say. In addition, concessions that do not conform to economic laws directly weaken the ability of enterprises to continue research and development, and how can we talk about the GDP contribution rate that can be provided in the future?



The third trigger is the price reduction of electric vehicles, and the price reduction of power batteries hits fuel vehicles.


The price reduction of electric vehicles, indicating that the industry has begun to enter the "independent growth period" and "profit window period", is a good thing, but it is by no means a reason to trigger the price reduction of fuel vehicles, because the current major automobile manufacturers have electric vehicle products, electric vehicles to achieve profitability, on the fuel vehicle to make profits, it does not make sense.


Energy transformation, industrial upgrading, to achieve high-quality development, the ultimate goal is to improve efficiency. Whether it is a fuel car or an electric vehicle, it is not the only one, it is impossible to cover the whole range, let the profit reduce the price, how to achieve high-quality development after the enterprise after a small profit?


The author believes that the automotive industry and automobile companies can achieve high-quality development, and can discuss from the aspects of fuel vehicles, electric vehicles and hydrogen fuel cell vehicles.


1. Fuel vehicles. The challenge of fuel vehicles is to reduce the consumption of fossil energy, the second is to control and reduce the emission of harmful substances, and the third is the adaptability of applying renewable energy. For transportation equipment with internal combustion engine as the main driving force, the author believes that hybrid should be applied as the main new technology route, called hybrid vehicles, which has been verified in international and domestic practice. It should be noted that the power part of the hybrid system, if you choose to synthesize renewable methanol fuel, is the best at the moment.


2. Electric vehicles. The challenge of electric vehicles is the convenience of power battery energy storage, the second is the efficiency of power battery energy storage, and the third is the pollution-free recycling and treatment of waste power batteries. Now it is especially clear that electric vehicles are by no means zero-emission at present, and electric vehicles are not new energy vehicles. For the sake of the popularization of knowledge and the scientific outlook on development of future generations, these two confused concepts need to be corrected and corrected.


For electric vehicles with power batteries as the main driving power, the author believes that range extender technology should be promoted as the main new technology route, and the reasons have been explained in previous articles. It should also be noted that the fuel used for range extender power is methanol fuel.


3. Hydrogen fuel cell vehicles. The challenges are safety, manufacturing and use costs, and the financial intensity of hydrogen fuel refueling system construction. The author believes that the development of hydrogen fuel cell vehicles should start with the promotion and application of methanol on-board (online) hydrogen production and methanol reforming fuel cell vehicles, which can not only greatly reduce the requirements of safety factor, but also effectively achieve cost control.


In Chairman Mao Zedong's poem "Seven Laws - and Mr. Liu Yazi", there is a verse that "the wind and things should be long-term and the eyes should be measured", which refers to the need to look at all things in the world with a broader and long-term vision, to open our eyes to measure, to broaden our horizons, to focus on the overall situation, and to look far away in everything.


In summary, the author believes that this is a price reduction tide behavior that lacks self-confidence, and from the perspective of the healthy and sustainable development of the industry, allowing it to continue may become a failure that leads to industrial damage. Only by insisting on innovation is the right way to achieve sustainable development.


Originally published on China Automotive News on March 27, 2023