The joint efforts of the government and the market behind the launch of new energy vehicles in the countryside

Recently, the "2023 New Energy Vehicles Going to the Countryside Activity" jointly organized by the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce, and the National Energy Administration was officially organized and implemented. This marks that in recent years, China has followed the trend of transformation in the automotive industry and achieved positive results in promoting the development of the new energy vehicle industry

Recently, the "2023 New Energy Vehicles Going to the Countryside Activity" jointly organized by the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce, and the National Energy Administration was officially organized and implemented. This marks that in recent years, China has followed the trend of transformation in the automotive industry and achieved positive results in promoting the development of the new energy vehicle industry.

In response to this "new energy vehicles going to the countryside", many people in the industry have compared it to the previous "home appliances going to the countryside". I believe that this new energy vehicle move to the countryside will more effectively boost the new energy vehicle industry and expand the new energy vehicle market. However, unlike the "home appliances going to the countryside" in the past, the background conditions faced by the new energy vehicles going to the countryside are different. Firstly, the automotive industry, including new energy vehicles, is experiencing a new round of "price reduction cycle" this year; At the same time, the policy impact of "carbon neutrality" is gradually deepening, especially in the automotive industry. Many experts believe that China will achieve the substitution of new energy vehicles for fuel vehicles by 2050.

The current mainstream view in the industry is that the new energy vehicle industry is rapidly developing and has entered a new stage of comprehensive market-oriented development. The rural "sinking" of new energy vehicles and charging services will become an important trend for the future development of the industry.

It is understood that the penetration rate of new energy vehicles in county and township areas in China is still relatively low. According to data from the China Passenger Transport Association, the penetration rate of pure electric passenger vehicles in county and township areas was 16% in March 2023, and the penetration rate of plug-in hybrid passenger vehicles in county and township areas was 8%. There is significant room for improvement in the penetration rate in county and township areas. It is expected that by 2030, the number of new energy vehicles in China will be 145 million, and the number of new energy vehicles in rural areas will be about 65 million.

"The sales of new energy vehicles in rural areas and the construction of charging networks need to complement each other to achieve the desired results." As an expert in the field of new energy vehicle charging networks, Wang Yang, the founder and CEO of Energy Chain Smart (NASDAQ: NAAS), believes that China's new energy vehicles are dominated by pure electric vehicles, which requires the support of corresponding Charging station and charging networks. Otherwise, it is like a situation where a gasoline truck cannot find a gas station, creating a situation where a clever woman cannot cook without rice.

Regarding the challenges faced by the development of new energy vehicles in rural areas, the Executive Meeting of the State Council on May 5th explicitly proposed to "deploy and accelerate the construction of charging infrastructure to better support the development of new energy vehicles in rural areas and rural revitalization". With the consent of the State Council, the National Development and Reform Commission and the National Energy Administration have formulated the Implementation Opinions on Accelerating the Construction of Charging Infrastructure and Better Supporting the Rural Revitalization of New Energy Vehicles.

The construction of charging networks in rural areas will be formed under the joint action of the government and the market. Wang Yang believes that with strong support from national policies, the "sinking" of new energy vehicles and charging services in rural areas will become one of the important trends in the future development of the industry.

With government investment support, the sensitive and fragile power grid in rural areas will be fundamentally improved. With the implementation of policies such as ultra-high voltage and rural power grid consolidation, it will provide an infrastructure environment for new energy vehicles to go to the countryside. However, due to the imbalance in population distribution and development level in rural areas, in order to ensure the effectiveness of capital investment, it is necessary to fully leverage the role of the market as the "invisible hand".

Currently, the total number of public stakes below the county level in China accounts for 9.45% of the total number of public stakes in the country, with a relatively small number; The total number of public piles below the county level accounts for 9.65% of the total number of public piles in China, and the total number of specialized piles accounts for 8.84% of the total number of specialized piles in China; The total number of DC piles below the county level accounts for 11.67% of the total number of DC piles in China, and the total number of AC piles accounts for 7.79% of the total number of AC piles in China.

The insufficient construction of public charging infrastructure in rural areas, the difficulty in installing and sharing charging facilities in residential communities, and the prominent contradiction between supply and demand during certain periods are hindering the release of the consumption potential of new energy vehicles in rural areas.

Based on considerations of the overall development direction, Wang Yang stated that Nenglian Smart Power will vigorously promote the penetration of charging services in rural areas. For the construction of charging networks in third and fourth tier cities and rural areas, there are currently over 20000 charging stations and over 110000 charging guns at and below the county level nationwide. The market coverage rate of energy chain smart power stations put into operation in county-level markets is nearly 20%.

It is reported that at the 2023 Rural Energy Development Conference recently held, Energy Chain Smart Power, together with innovative products such as self developed automatic charging robots, Charging station and automatic vending machines, will provide charging service industry solutions for new energy vehicles to go to the countryside and improve the charging infrastructure in rural areas.

With the continuous growth of farmers' income in China and the accelerated upgrading of rural consumption, it is expected that there will be an additional consumption demand of around 2 trillion yuan per year. Give full play to the important role of the rural consumer market, make good use of the policy of industrial products to the countryside, including new energy vehicles to the countryside, and better meet the needs of rural people for a better life, which will certainly promote the steady growth of rural consumption while achieving effective quality improvement, and provide strong support for building a Dual circulation.

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