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[The foam of new energy vehicles continued to expand.]

M-usic

Many people may not have thought that the surge in sales of new energy vehicles will become a "bad omen" for the automotive market.

In the past first half of the year, the automotive sector remained a reliable sector that led the capital market. According to Tonghuashun Finance and Economics, from the beginning of this year to the end of June, the maximum increase in the index of the entire vehicle sector reached 41.54%, while the maximum increase in the index of the new energy vehicle sector was 24.23%.

In terms of terminal sales, compared to 2020 under the epidemic, the retail sales of narrow passenger vehicles in the first half of this year reached 9.904 million units, a year-on-year increase of 28.42%, and the growth of new energy passenger vehicles reached an astonishing 222.22%.

However, entering the third quarter, the market has undergone a sharp change. On the one hand, the sales of new energy vehicles continued to soar, while on the other hand, the overall passenger vehicle market continued to decline.

For a while, the benefits of new energy vehicles have become less worthy of celebration, but have blown up more foam, making people unable to see the real investment value behind them. It can be seen from this abnormal trend that if the new energy vehicles continue to rise against the trend, the probability of the auto industry's foam bursting in the capital market and terminal market will be greater and greater in the second half of the year.

Unprecedented off-season, cool in the third quarter

01

This third quarter can be said to be the unprecedented third quarter in history.

Everyone knows that July and August are the off-season for the overall market, but this year's July and August not only have a significant decline compared to last year's off-season in July and August, but even compared to 2019, the retail sales of passenger vehicles in August also have a 7.1% decline.

More seriously, passenger car sales in August this year even experienced an abnormal 3.3% month-on-month decline.

It should be understood that except for the 2008 Beijing Olympic Games, which led to a higher value in July, China's car market has not experienced a month-on-month decline in August in this century. Over the years, the monthly positive month-on-month increase has basically been in the range of 6-10%. The unprecedented abnormal decline in August tells us that the current Malaysian epidemic is causing an unprecedented shortage of chips in China's automotive market.

As I watched, September had already passed by. According to the latest data from the Passenger Car Federation, the overall retail sales of passenger cars in the first two weeks of September fell by 9% year-on-year. Moreover, at present, the channel inventory of joint venture and luxury car companies has been at a very low level, and the promotion efforts in the car market have been significantly recovered. Currently, it is in a special period of "supply determines demand".

The reality tells us that the year-on-year decline in the third quarter has become an irreversible fact.

However, compared to the unprecedented decline in overall sales, it is even more abnormal that the new energy vehicle market is seriously inconsistent with the market trend.

In the August manufacturer sales ranking, unlike a number of traditional automotive companies, which experienced a year-on-year decline, BYD, GAC EAN, SAIC General Motors Wuling and other automotive companies specializing in new energy products all achieved a year-on-year high increase.

BYD sold 60508 new energy vehicles, a year-on-year increase of 331.9%, and the Qin Plus DM-i model made a strong breakthrough of 12000 vehicles, overwhelming TSLA Model Y. GAC Aian also successfully achieved sales of 1.16 million vehicles, up 115% year-on-year.

From the perspective of the market as a whole, the wholesale sales of new energy passenger vehicles reached 304000 units in August, up 23.7% month on month. Retail sales also reached 249000 units, up 167.5% year-on-year and 12.0% month-on-month, significantly exceeding expectations.

What is even more shocking is the exponential increase in the penetration rate of new energy vehicles.

In January this year, the monthly market penetration rate of new energy passenger vehicles was 7.18%. By August, this figure had reached 17.14%.

Looking back on history, since 2005, China's new energy vehicle penetration rate has exceeded 1% in 10 years; Then it took another three years, increasing from 1% in 2016 to 5% in 2019. Today, it has soared from 7.18% to 17.14%, taking only eight months.

While people are cheering for the adverse trend of new energy vehicles, the author clearly feels that there are market risks that cannot be ignored behind this wave of upsurge in new energy vehicles.

The rise of new energy vehicles against the trend may not be a good thing

02

The sustained increase in the penetration rate of new energy vehicles is a long-term trend, but the current increase in penetration rate has exceeded the normal market situation.

"When things go wrong, there must be monsters, and the penetration rate of excessive acceleration is actually just a false fire.".

Faced with a lack of cores, many car companies have had to prioritize the supply of popular, high-margin models. Driven by the dual credit policy, many car companies will give priority to the supply of new energy vehicles. Not long ago, Gan Jiayue, CEO of Geely Automotive, stated that it would give priority to protecting new energy vehicles in the event of a chip shortage. As the leader of independent automobile enterprises, Geely still has to give priority to ensuring new energy, and similar operations may not be unique.

This also means that the rise of new energy vehicles is based on "occupying" traditional vehicle resources.

Secondly, the reason why the penetration rate of new energy has increased rapidly is more crucial because the fuel vehicles that originally occupied the main market share have significantly decreased, rather than the expansion of the overall market size.

Since June, when the sales of narrow sense passenger vehicles have experienced a year-on-year year-on-year decrease in consecutive months, the sales of new energy passenger vehicles have not only achieved a continuous year-on-year increase of more than 160%, but also far exceeded the first half of the original peak sales season. Especially when the year-on-year decline in the overall sales of passenger vehicles continues to expand, the penetration rate of new energy vehicles has increased by 2.36% compared to July.

Affected by this market situation, the stock prices of star targets in the industrial chain such as German Nano and Tianci Materials have all increased by more than 25% in the past half month, with the maximum daily increase of German Nano reaching 13.57% and Tianci Materials also reaching 8.96%.

Whether it's a rise in real demand or an abnormal surge in penetration rates like today, whenever there's good news about the new energy vehicle industry, the industry chain will surge.

However, at present, we need to make it clear that the increase in sales and penetration of new energy vehicles in the context of core shortage is not based on the overall healthy development of the market, but rather on the increasingly unbalanced supply and demand supply chain.

This means that the current foam contained in the new energy vehicle sector is further expanding, and it is likely that there will be a more intense shock callback in the future.

In addition, the collective rise in the price of raw materials for finished vehicles this year is also a crisis that cannot be ignored in the industry. The price of steel has risen to an all-time high. Stainless steel has increased from 8200 yuan per ton last year to 14000 yuan per ton today; Iron plate increased from 4200 yuan per ton last year to 8300 yuan per ton.

As a key material for power lithium batteries and automotive internal circuitry, the surge in copper prices has also added cost pressure to electric vehicles. Secondly, the key components of power lithium batteries, such as lithium, cobalt, nickel, and other metals, have seen their prices rise by at least 47% in the past 12 months.

Moreover, the current well-known crazy chip prices

In the face of the overall upward trend in the upstream supply chain, it is difficult for the main engine manufacturers to pass on the rising costs through price increases. Affected by this factor, individual listed car companies have experienced a phenomenon of "rising revenue without increasing profits" in the first half of the year.

BYD's operating revenue in the first half of the year was 90.885 billion yuan, up 50.2% year-on-year; Among them, the revenue of the automotive, automotive related products and other products business segment was about 39.147 billion yuan, up 22.1%. However, the net profit attributable to the parent company decreased by 29.4% to only 1.174 billion yuan. "Perhaps affected by the news, BYD's share price has dropped from 297 yuan per share on August 26 to 255 yuan per share today.".

In summary, the current abnormal expansion of the new energy vehicle market as a whole is not a good news to cheer on, but rather a dangerous signal to be vigilant about.

Because on the one hand, this market is facing pressure from the supply chain to increase prices, and on the other hand, this upsurge against the trend is at the expense of the overall market decline.

Therefore, if the penetration rate of new energy vehicles continues to rise against the trend in the second half of the year, it will mean that the foam in the new energy vehicle sector continues to expand, and will soon usher in a severe shock callback risk.

To get rid of this abnormal situation, the fundamental hope is to ease the balance between supply and demand in the global supply chain.

However, the current global epidemic is not yet clear, and many industry insiders have generally postponed the forecast of the global chip supply and demand balance until next year or even the year after. Tian Yulong, the chief engineer of the Ministry of Industry and Information Technology, also said that although the "lack of cores" has been somewhat alleviated, the overall problem of chip supply chain tension will still exist for some time.

Therefore, in the next few months, the sales rate of new energy vehicles will probably continue to rise against the trend, but it is estimated that neither the new energy vehicle sector nor the stock price of the entire vehicle sector will be able to reproduce the soaring trend from last year to the first half of this year.

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