Unconsciously, the year 2018 is more than half the time. Many people are wondering where the time has gone? Based on this time node, we look back on the major events and trends in the domestic auto parts field in the past six months, sort out the market operation context and industry development trend, and make a mid year inventory for readers. Prosperity and decline, confusion and helplessness, integration and reconstruction, innovation and destruction... In the first half of this year, honey and tears, wind and thunder, constitute the glory and dream of China's parts industry.

Highlights of auto parts in the first half of the year

Different types of joint ventures emerge and market segments are brewing changes

Since this year, the wave of joint venture in China's auto parts industry has been surging. On July 5, Changan Automobile and BYD signed a strategic cooperation agreement in Shenzhen to jointly establish a joint venture company focusing on the production and sales of new energy power batteries, which is sufficient to illustrate the continuation of this phenomenon. The joint venture around spare parts, of course, can not be separated from the catalysis of "new four modernizations", the general trend of energy conservation and environmental protection, and the strong drive of the "double integral" policy.

In January, at the 2018 World Economic Forum, Zeng Qinghong, Chairman of GAC Group, said that they were negotiating with battery manufacturers to build a joint venture factory in Guangzhou. Almost at the same time, Shanghai Electric Drive and Dongfeng Industry (formerly an important part of Dongfeng Motor Group Co., Ltd., which was restructured in October 2017) announced the establishment of a joint venture, "Dongyang Electric Drive System Co., Ltd.", which will carry out electric drive systems, fuel cell engine systems, new energy vehicle core electrical systems and other projects. Hainachuan and Gestamp signed an agreement to jointly establish a "lightweight" auto parts company.

In February, Fu'ao Auto Parts Co., Ltd. signed a Memorandum of Understanding with Valeo Siemens Automotive Electronics Germany Co., Ltd. to carry out cooperation in the field of core components of new energy vehicle powertrain. In March, SAIC Infineon Automotive Power Semiconductor (Shanghai) Co., Ltd., a joint venture established by SAIC Group and Infineon at a ratio of 51:49 shares, officially opened. In April, Hainachuan signed joint venture agreements with Haila and Magna respectively. Geely and GAC respectively signed agreements with Aixin of Japan to produce 6AT. Dongfeng Components and Fu'ao signed a contract to jointly establish Dongfeng Fu'ao Pump Industry Co., Ltd. On June 21, ThyssenKrupp, Zhejiang Jingu Co., Ltd. and other Chinese partners signed a joint venture agreement to jointly produce lightweight hot formed wheels... This is not all the cases in the spare parts field in the first half of this year, they are only some typical representatives, but it is conceivable that the market is surging with various variables.

If we insist on classifying these joint venture cases, they can include: Sino foreign joint ventures, whole (or parts enterprises with vehicle background) zero joint ventures, and integration among large state-owned enterprises that the industry is eager for. As a market behavior, joint ventures are beyond reproach. However, from the perspective of independent development of China's parts industry, some joint ventures have filled us with expectations, some joint ventures have high expectations, and some have even worried us. With the emergence of new competitors, it is hard to avoid changes in the market segments. However, regardless of the changes, the theme of improving the independent innovation ability, mastering the key core technologies, transformation and upgrading development of China's auto parts industry will be eternal.

Accelerate the upgrading of the Sixth National Congress, and accelerate the positive layout of new energy power

With the "ban on selling fuel vehicles" appearing in the development agenda of some countries and vehicle enterprises, the internal combustion engine seems to have encountered an unprecedented crisis, which has aroused great concern from the industry. The discussion around this has not stopped this year.

However, in China, the industry consensus is clear. On January 15, at the "International Seminar on the Transformation and Upgrading of Traditional Fuel Vehicle Power Technology", Wan Gang, Vice Chairman of the CPPCC National Committee and then Minister of the Ministry of Science and Technology, pointed out: "The internal combustion engine will still be the main force in the automobile power market for a long time. It has an irreplaceable position, especially in freight, passenger transport and ship transport."

It has become a concerted action of the industry to upgrade products to the national six standards. Yuchai, Weichai, FAW Jiefang Engine Business Department, Cummins, Shangfeihong, Valin Hanma Power and other engine enterprises have all released the national six product this year. For example, Weichai's masterpiece - the new Euro VI powertrain, including Weichai WP10H engine, Fast AT transmission and Hande axle, all three core components have been localized. Yuchai released 14 national six engines for vehicles, which is the first time that the domestic internal combustion engine industry has released a series of national six products. CA6DL3-35E6 is a national six heavy duty diesel engine first launched by FAW Jiefang Engine Business Unit. It integrates EGR post-treatment technology and works with a single channel hot end control valve to improve the uniformity of exhaust gas in the air and effectively reduce nitrogen oxide emissions. At the 2018 Beijing Auto Show, Shanghai Diesel Power exhibited four national six engines. Dongfeng Cummins announced that the new generation ISZ13 six engine will be launched in 2019

While the internal combustion engine enterprises are in full swing to develop the national six products, the Shenzhen and Guangzhou municipal governments eagerly put forward plans to implement the national six emission standards for light vehicles ahead of schedule in March and May of this year respectively. The disturbed rhythm temporarily confused the engine and related parts suppliers, but it also sent a signal to the industry to transform and upgrade as soon as possible.

In the face of increasingly fierce market competition and increasingly stringent emission requirements, some internal combustion engine enterprises are actively developing new energy vehicle power technology while accelerating the transformation and upgrading of internal combustion engines. In May, Weichai Power signed a strategic agreement with Siris Power Holdings Limited, a supplier of solid oxide fuel cells in the United Kingdom, to purchase 20% of its shares, and plans to establish a joint venture in China with Ceres Power to carry out comprehensive cooperation in the field of solid oxide fuel cells. Yuchai also launched a new generation hybrid system development and integrated fuel cell system project this year.

The upgrading of national six emission standards is the source power for the transformation of the internal combustion engine industry, and the development of new energy vehicle power is the driving force for the internal combustion engine industry to move towards a new life.

Strong Foreign Investment Expanding Advantages, Self reliance and Cooperation Breakthrough

In the first half of this year, the automatic transmission industry was in a violent shock and soul stirring.

On April 2, Japan's Toyota, Honda, Nissan, Mazda, Mitsubishi, Suzuki, Subaru, Dafa, Isuzu, and Aixin AW and Gatco, two automatic transmission enterprises, jointly established the Automotive Power Transmission Technology Research Association (TRAMI).

Together with university research institutions, these 11 companies will conduct basic and applied research on transmission technology, so as to accelerate technological progress, cultivate more talents and enhance the influence of Japan's automobile transmission industry. 260 million yen of preliminary research funds and more than 100 researchers are from the above 11 enterprises. In the future, the Japanese government may give special support.

TRAMI claims that its specific role is as follows: to lead the industry and academia to carry out R&D cooperation around transmission technology; Enrich the research results database, and realize the accumulation and application of technical knowledge in the driving field; Further expand the research team and carry out the linkage between industry, education and officials.

Aixin and Gatco have dominated the global AT and CVT markets for many years respectively. In contrast, China's autonomous automatic transmission is still in the primary stage of industrialization, and enterprises are fighting alone, fighting independently, weak, and fragmented for a long time. Japan's parts and components enterprises have joined forces with the whole vehicle enterprises to consolidate and strengthen their competitive strength, which has strongly stimulated China's automatic transmission industry.

More exciting things followed. On April 24, Geely Automobile and GAC Group signed joint venture agreements with Japan Aixin on the production and manufacturing of 6AT. It is unusual for Aixin to bind two independent brand vehicle enterprises, and to occupy the market that should be owned by independent automatic transmission enterprises, which has aroused strong response from the industry. The voice of "who will save the industry of autonomous automatic transmission" has been rising and rising for a long time.

At this time, the Chinese automatic transmission industry came with gratifying news. On June 15, the launch ceremony of Wanliyang new type CVT25 stepless automatic transmission was held in Wuhu Base of Passenger Vehicle Transmission Business Department of Zhejiang Wanliyang Co., Ltd. This marks the official launch of Wanliyang CVT25. Zhang Zhidong, CEO of the company, said, "This upgrading product that we are developing independently is a milestone." It is reported that Wanliyang CVT25 is equipped with Chery GX cars that will be launched soon. In addition, Chery has a number of models equipped with CVT25 under development. Liang Jian, chief engineer of Geely Automobile Powertrain Integration Department, said on the spot: "We require Wanliyang CVT25 to match Geely models in 2020."

Wanliyang has carried out large-scale supporting cooperation with Chery, an independent vehicle manufacturer, with CVT25, and is expected to "join hands" with Geely Automobile in the future, which greatly encourages the continuous hit of the independent automatic transmission industry. In this unavoidable market competition, only self-improvement and joint efforts are the real way out.

Technical threshold requirements are raised and recycling is welcomed

On February 13, the Ministry of Finance officially released the Notice on Adjusting and Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles jointly drafted by the four ministries on the official website. The new policy will "improve the technical threshold requirements", clearly put forward to encourage the application of high energy density and low energy consumption models, significantly tilt the subsidy funds to higher technology models, and maintain the subsidy amount for fuel cells unchanged.

The new policy has a great impact on the power battery industry, especially on the encouragement of high energy density batteries, which directly affects the development trend of ternary battery and lithium phosphate battery enterprises. Ternary battery enterprises further consolidate their leading advantages and usher in faster development. Taking Ningde era as an example, the total installed capacity from January to May this year is 5.4GWh, accounting for 42.5% of the total installed capacity in China, nearly half of the country.

Not only that, enterprises such as BYD, which used to focus on lithium iron phosphate batteries, have also started to develop and produce ternary batteries. The joint venture between Changan Automobile and BYD will focus on power battery production, sales and other business sectors, with the capacity planned according to 10GWh. In the future, Changan Automobile and BYD will make full use of and integrate their respective advantages, jointly make active exploration in the matching of power battery and vehicle, industrial application of power battery, etc., and jointly build a world leading platform for the industrialization of automotive power battery.

The new subsidy policy has further improved the concentration of the power battery market and played an obvious role in the survival of the fittest. One of the major reasons why enterprises such as Waterma and Zhuhai Yinlong are in trouble is that they did not respond to the adjustment of subsidy policies as early as possible.

On January 26, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Ministry of Environmental Protection, the Ministry of Transport, the Ministry of Commerce, the General Administration of Quality Supervision, Inspection and Quarantine, and the Energy Administration jointly issued the Interim Measures for the Administration of the Recycling of New Energy Vehicle Power Batteries, which defined the responsibilities of power battery manufacturers in terms of redesign, production and recycling, and did a good job in the standardization, information disclosure, industry collaboration, and encouraged battery manufacturers to cooperate with comprehensive utilization enterprises, Under the premise of ensuring safety and controllability, according to the principle of cascade utilization before recycling, the waste power batteries should be rationally utilized in a multi-level and multi-purpose way to reduce comprehensive energy consumption, improve energy utilization efficiency, improve comprehensive utilization level and economic benefits, and ensure the environmental protection disposal of unusable residues.

It can be predicted that power battery manufacturers will try a variety of power battery cascade utilization methods together with vehicle enterprises and operating enterprises. For example, Pratt&Whitney has fully promoted the power exchange mode with BAIC New Energy and other enterprises to better realize the cascade utilization of retired batteries.

Concern over the weak mixing route with unclear development prospects

On January 8, the project of "Key Technologies and Industrialization of Low Energy Consumption Plug in Hybrid Passenger Vehicles", which was completely independently developed by SAIC, won the second prize of the 2017 National Science and Technology Progress Award. This is one of the few automotive projects that won the National Science and Technology Progress Award this year, and it is also the first time that the new energy passenger vehicle technology has won a heavyweight science and technology award.

SAIC won the award for this project because of its plug-in hybrid system solution centered on "EDU intelligent electric drive transmission". Previously, the core technology in the field of plug-in hybrid technology was basically in the hands of international automobile giants. Electric drive, electric control and battery technology are the core of new energy vehicle technology. Only by fully realizing innovation with independent intellectual property rights in these three fields can we complete the breakthrough of core technology. The breakthrough of the three electric technologies and the proposal of a new plug-in hybrid system product structure scheme have enabled SAIC's new energy vehicle products to achieve a comprehensive transcendence of energy efficiency, a significant improvement in driving performance and a safe operation guarantee. SAIC's EDU plug-in hybrid system has also become one of the three most advanced hybrid technologies in the world comparable to THS and General VOLTEC.

In terms of policy, plug-in hybrid power is mainly affected by two policies. This year, under the "double points" policy, plug-in hybrid vehicles still account for a certain percentage of new energy vehicle points, which, to a certain extent, improves the initiative of vehicle enterprises in deploying PHEVs. In addition to SAIC and BYD, Geely, Trumpchi, Chang'an, Hanteng, Hongqi and other auto brands have also introduced plug-in models.

However, with the release of the draft of the Regulations on the Investment Management of the Automobile Industry, plug-in hybrid vehicles have been formally included in the ranks of fuel vehicles, rather than the previous new energy vehicles. Once plug-in hybrid vehicles are not counted as new energy vehicles, it means that they cannot enjoy relevant subsidy policies. How to reduce the cost has become a problem facing the subsequent development of plug-in hybrid power.

Under the policy of "double points", the weak hybrid route represented by 48V and P2 technology has also entered the enterprise's vision. Continental and Sichuan Chengfei Integrated Technology Co., Ltd. established a joint venture through their subsidiaries to develop and produce 48V battery systems. The world's first P2 hybrid module of Schaeffler was officially put into production in Jiangsu Taicang manufacturing base... In the future, which or which hybrid technology routes will become new "outlets"? Facing the new market and policy environment, how will enterprises make choices? These will become the focus of the component field.

Market development returns to rational technical route step by step

Since this year, the automotive intelligent networking field has become less restless and has begun to return to rationality. A large part of the reason is that several autonomous driving traffic accidents have occurred in Tesla and Uber, which has sounded the alarm bell for the rash progress in this subdivision field.

In China, the strong push at the policy level is still playing a role. In January, the National Development and Reform Commission released the Innovative Development Strategy for Smart Cars (draft for comments) on its website, which clearly stated that China's smart cars should take three steps.

By 2020, the technical innovation, industrial ecology, road network facilities, regulations and standards, product supervision and information security system framework of China's standard intelligent vehicles will be basically formed. Medium and high level intelligent vehicles have achieved market-oriented application, and the demonstration operation in key regions has achieved results. The construction of intelligent road transportation system has made positive progress. The coverage of vehicle wireless communication network (LTE-V2X) in big cities and highways has reached 90%, and Beidou high-precision space-time services have achieved full coverage.

By 2025, the technical innovation, industrial ecology, road network facilities, regulations and standards, product supervision and information security system of China's standard intelligent vehicles will be fully formed. New cars are basically intelligent, and high-level intelligent cars are applied in a large scale. The "people vehicle road cloud" has achieved a high degree of collaboration, and the new generation of vehicle wireless communication network (5G-V2X) basically meets the development needs of intelligent vehicles.

By 2035, China's standard smart cars will enjoy a global reputation, take the lead in building a smart car power, and the whole people will share the "safe, efficient, green and civilized" smart car society.

On the other hand, BAT and many start-ups began to take a gradual development path, and the first thing to ensure is traffic safety. On July 4, Baidu Apollo released version 3.0 of Apollo, announcing that the world's first L4 mass production autonomous bus, "Apollon", was officially put into mass production. In the use scene, it was only on the relatively closed park road, not the open road.

Not only BAT, but also startups have a clearer understanding of the development of intelligent networking technology. For the time being, regardless of L3 and L4, it is extremely important to deal with L0 ～ L2. As the president of a company said, "The current market demand for L0~L1 automatic driving mass production products is very strong, and it is a pragmatic choice to participate in market competition step by step."

In addition, the development of test standards related to ICN has also been carried out in an orderly manner. Third party scientific research institutions, including China Automobile Center and Tsinghua University Suzhou Automobile Research Institute, are actively promoting the construction of ICN automobile traffic scene library with Chinese characteristics.

Unconsciously, the year 2018 is more than half the time. Many people are wondering where the time has gone? Based on this time node, we look back on the major events and trends in the domestic auto parts field in the past six months, sort out the market operation context and industry development trend, and make a mid year inventory for readers. Prosperity and decline, confusion and helplessness, integration and reconstruction, innovation and destruction... In the first half of this year, honey and tears, wind and thunder, constitute the glory and dream of China's parts industry.

Highlights of auto parts in the first half of the year

Different types of joint ventures emerge and market segments are brewing changes

Since this year, the wave of joint venture in China's auto parts industry has been surging. On July 5, Changan Automobile and BYD signed a strategic cooperation agreement in Shenzhen to jointly establish a joint venture company focusing on the production and sales of new energy power batteries, which is sufficient to illustrate the continuation of this phenomenon. The joint venture around spare parts, of course, can not be separated from the catalysis of "new four modernizations", the general trend of energy conservation and environmental protection, and the strong drive of the "double integral" policy.

In January, at the 2018 World Economic Forum, Zeng Qinghong, Chairman of GAC Group, said that they were negotiating with battery manufacturers to build a joint venture factory in Guangzhou. Almost at the same time, Shanghai Electric Drive and Dongfeng Industry (formerly an important part of Dongfeng Motor Group Co., Ltd., which was restructured in October 2017) announced the establishment of a joint venture, "Dongyang Electric Drive System Co., Ltd.", which will carry out electric drive systems, fuel cell engine systems, new energy vehicle core electrical systems and other projects. Hainachuan and Gestamp signed an agreement to jointly establish a "lightweight" auto parts company.

In February, Fu'ao Auto Parts Co., Ltd. signed a Memorandum of Understanding with Valeo Siemens Automotive Electronics Germany Co., Ltd. to carry out cooperation in the field of core components of new energy vehicle powertrain. In March, SAIC Infineon Automotive Power Semiconductor (Shanghai) Co., Ltd., a joint venture established by SAIC Group and Infineon at a ratio of 51:49 shares, officially opened. In April, Hainachuan signed joint venture agreements with Haila and Magna respectively. Geely and GAC respectively signed agreements with Aixin of Japan to produce 6AT. Dongfeng Components and Fu'ao signed a contract to jointly establish Dongfeng Fu'ao Pump Industry Co., Ltd. On June 21, ThyssenKrupp, Zhejiang Jingu Co., Ltd. and other Chinese partners signed a joint venture agreement to jointly produce lightweight hot formed wheels... This is not all the cases in the spare parts field in the first half of this year, they are only some typical representatives, but it is conceivable that the market is surging with various variables.

If we insist on classifying these joint venture cases, they can include: Sino foreign joint ventures, whole (or parts enterprises with vehicle background) zero joint ventures, and integration among large state-owned enterprises that the industry is eager for. As a market behavior, joint ventures are beyond reproach. However, from the perspective of independent development of China's parts industry, some joint ventures have filled us with expectations, some joint ventures have high expectations, and some have even worried us. With the emergence of new competitors, it is hard to avoid changes in the market segments. However, regardless of the changes, the theme of improving the independent innovation ability, mastering the key core technologies, transformation and upgrading development of China's auto parts industry will be eternal.

Accelerate the upgrading of the Sixth National Congress, and accelerate the positive layout of new energy power

With the "ban on selling fuel vehicles" appearing in the development agenda of some countries and vehicle enterprises, the internal combustion engine seems to have encountered an unprecedented crisis, which has aroused great concern from the industry. The discussion around this has not stopped this year.

However, in China, the industry consensus is clear. On January 15, at the "International Seminar on the Transformation and Upgrading of Traditional Fuel Vehicle Power Technology", Wan Gang, Vice Chairman of the CPPCC National Committee and then Minister of the Ministry of Science and Technology, pointed out: "The internal combustion engine will still be the main force in the automobile power market for a long time. It has an irreplaceable position, especially in freight, passenger transport and ship transport."

It has become a concerted action of the industry to upgrade products to the national six standards. Yuchai, Weichai, FAW Jiefang Engine Business Department, Cummins, Shangfeihong, Valin Hanma Power and other engine enterprises have all released the national six product this year. For example, Weichai's masterpiece - the new Euro VI powertrain, including Weichai WP10H engine, Fast AT transmission and Hande axle, all three core components have been localized. Yuchai released 14 national six engines for vehicles, which is the first time that the domestic internal combustion engine industry has released a series of national six products. CA6DL3-35E6 is a national six heavy duty diesel engine first launched by FAW Jiefang Engine Business Unit. It integrates EGR post-treatment technology and works with a single channel hot end control valve to improve the uniformity of exhaust gas in the air and effectively reduce nitrogen oxide emissions. At the 2018 Beijing Auto Show, Shanghai Diesel Power exhibited four national six engines. Dongfeng Cummins announced that the new generation ISZ13 six engine will be launched in 2019

While the internal combustion engine enterprises are in full swing to develop the national six products, the Shenzhen and Guangzhou municipal governments eagerly put forward plans to implement the national six emission standards for light vehicles ahead of schedule in March and May of this year respectively. The disturbed rhythm temporarily confused the engine and related parts suppliers, but it also sent a signal to the industry to transform and upgrade as soon as possible.

In the face of increasingly fierce market competition and increasingly stringent emission requirements, some internal combustion engine enterprises are actively developing new energy vehicle power technology while accelerating the transformation and upgrading of internal combustion engines. In May, Weichai Power signed a strategic agreement with Siris Power Holdings Limited, a supplier of solid oxide fuel cells in the United Kingdom, to purchase 20% of its shares, and plans to establish a joint venture in China with Ceres Power to carry out comprehensive cooperation in the field of solid oxide fuel cells. Yuchai also launched a new generation hybrid system development and integrated fuel cell system project this year.

The upgrading of national six emission standards is the source power for the transformation of the internal combustion engine industry, and the development of new energy vehicle power is the driving force for the internal combustion engine industry to move towards a new life.

Strong Foreign Investment Expanding Advantages, Self reliance and Cooperation Breakthrough

In the first half of this year, the automatic transmission industry was in a violent shock and soul stirring.

On April 2, Japan's Toyota, Honda, Nissan, Mazda, Mitsubishi, Suzuki, Subaru, Dafa, Isuzu, and Aixin AW and Gatco, two automatic transmission enterprises, jointly established the Automotive Power Transmission Technology Research Association (TRAMI).

Together with university research institutions, these 11 companies will conduct basic and applied research on transmission technology, so as to accelerate technological progress, cultivate more talents and enhance the influence of Japan's automobile transmission industry. 260 million yen of preliminary research funds and more than 100 researchers are from the above 11 enterprises. In the future, the Japanese government may give special support.

TRAMI claims that its specific role is as follows: to lead the industry and academia to carry out R&D cooperation around transmission technology; Enrich the research results database, and realize the accumulation and application of technical knowledge in the driving field; Further expand the research team and carry out the linkage between industry, education and officials.

Aixin and Gatco have dominated the global AT and CVT markets for many years respectively. In contrast, China's autonomous automatic transmission is still in the primary stage of industrialization, and enterprises are fighting alone, fighting independently, weak, and fragmented for a long time. Japan's parts and components enterprises have joined forces with the whole vehicle enterprises to consolidate and strengthen their competitive strength, which has strongly stimulated China's automatic transmission industry.

More exciting things followed. On April 24, Geely Automobile and GAC Group signed joint venture agreements with Japan Aixin on the production and manufacturing of 6AT. It is unusual for Aixin to bind two independent brand vehicle enterprises, and to occupy the market that should be owned by independent automatic transmission enterprises, which has aroused strong response from the industry. The voice of "who will save the industry of autonomous automatic transmission" has been rising and rising for a long time.

At this time, the Chinese automatic transmission industry came with gratifying news. On June 15, the launch ceremony of Wanliyang new type CVT25 stepless automatic transmission was held in Wuhu Base of Passenger Vehicle Transmission Business Department of Zhejiang Wanliyang Co., Ltd. This marks the official launch of Wanliyang CVT25. Zhang Zhidong, CEO of the company, said, "This upgrading product that we are developing independently is a milestone." It is reported that Wanliyang CVT25 is equipped with Chery GX cars that will be launched soon. In addition, Chery has a number of models equipped with CVT25 under development. Liang Jian, chief engineer of Geely Automobile Powertrain Integration Department, said on the spot: "We require Wanliyang CVT25 to match Geely models in 2020."

Wanliyang has carried out large-scale supporting cooperation with Chery, an independent vehicle manufacturer, with CVT25, and is expected to "join hands" with Geely Automobile in the future, which greatly encourages the continuous hit of the independent automatic transmission industry. In this unavoidable market competition, only self-improvement and joint efforts are the real way out.

Technical threshold requirements are raised and recycling is welcomed

On February 13, the Ministry of Finance officially released the Notice on Adjusting and Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles jointly drafted by the four ministries on the official website. The new policy will "improve the technical threshold requirements", clearly put forward to encourage the application of high energy density and low energy consumption models, significantly tilt the subsidy funds to higher technology models, and maintain the subsidy amount for fuel cells unchanged.

The new policy has a great impact on the power battery industry, especially on the encouragement of high energy density batteries, which directly affects the development trend of ternary battery and lithium phosphate battery enterprises. Ternary battery enterprises further consolidate their leading advantages and usher in faster development. Taking Ningde era as an example, the total installed capacity from January to May this year is 5.4GWh, accounting for 42.5% of the total installed capacity in China, nearly half of the country.

Not only that, enterprises such as BYD, which used to focus on lithium iron phosphate batteries, have also started to develop and produce ternary batteries. The joint venture between Changan Automobile and BYD will focus on power battery production, sales and other business sectors, with the capacity planned according to 10GWh. In the future, Changan Automobile and BYD will make full use of and integrate their respective advantages, jointly make active exploration in the matching of power battery and vehicle, industrial application of power battery, etc., and jointly build a world leading platform for the industrialization of automotive power battery.

The new subsidy policy has further improved the concentration of the power battery market and played an obvious role in the survival of the fittest. One of the major reasons why enterprises such as Waterma and Zhuhai Yinlong are in trouble is that they did not respond to the adjustment of subsidy policies as early as possible.

On January 26, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Ministry of Environmental Protection, the Ministry of Transport, the Ministry of Commerce, the General Administration of Quality Supervision, Inspection and Quarantine, and the Energy Administration jointly issued the Interim Measures for the Administration of the Recycling of New Energy Vehicle Power Batteries, which defined the responsibilities of power battery manufacturers in terms of redesign, production and recycling, and did a good job in the standardization, information disclosure, industry collaboration, and encouraged battery manufacturers to cooperate with comprehensive utilization enterprises, Under the premise of ensuring safety and controllability, according to the principle of cascade utilization before recycling, the waste power batteries should be rationally utilized in a multi-level and multi-purpose way to reduce comprehensive energy consumption, improve energy utilization efficiency, improve comprehensive utilization level and economic benefits, and ensure the environmental protection disposal of unusable residues.

It can be predicted that power battery manufacturers will try a variety of power battery cascade utilization methods together with vehicle enterprises and operating enterprises. For example, Pratt&Whitney has fully promoted the power exchange mode with BAIC New Energy and other enterprises to better realize the cascade utilization of retired batteries.

Concern over the weak mixing route with unclear development prospects

On January 8, the project of "Key Technologies and Industrialization of Low Energy Consumption Plug in Hybrid Passenger Vehicles", which was completely independently developed by SAIC, won the second prize of the 2017 National Science and Technology Progress Award. This is one of the few automotive projects that won the National Science and Technology Progress Award this year, and it is also the first time that the new energy passenger vehicle technology has won a heavyweight science and technology award.

SAIC won the award for this project because of its plug-in hybrid system solution centered on "EDU intelligent electric drive transmission". Previously, the core technology in the field of plug-in hybrid technology was basically in the hands of international automobile giants. Electric drive, electric control and battery technology are the core of new energy vehicle technology. Only by fully realizing innovation with independent intellectual property rights in these three fields can we complete the breakthrough of core technology. The breakthrough of the three electric technologies and the proposal of a new plug-in hybrid system product structure scheme have enabled SAIC's new energy vehicle products to achieve a comprehensive transcendence of energy efficiency, a significant improvement in driving performance and a safe operation guarantee. SAIC's EDU plug-in hybrid system has also become one of the three most advanced hybrid technologies in the world comparable to THS and General VOLTEC.

In terms of policy, plug-in hybrid power is mainly affected by two policies. This year, under the "double points" policy, plug-in hybrid vehicles still account for a certain percentage of new energy vehicle points, which, to a certain extent, improves the initiative of vehicle enterprises in deploying PHEVs. In addition to SAIC and BYD, Geely, Trumpchi, Chang'an, Hanteng, Hongqi and other auto brands have also introduced plug-in models.

However, with the release of the draft of the Regulations on the Investment Management of the Automobile Industry, plug-in hybrid vehicles have been formally included in the ranks of fuel vehicles, rather than the previous new energy vehicles. Once plug-in hybrid vehicles are not counted as new energy vehicles, it means that they cannot enjoy relevant subsidy policies. How to reduce the cost has become a problem facing the subsequent development of plug-in hybrid power.

Under the policy of "double points", the weak hybrid route represented by 48V and P2 technology has also entered the enterprise's vision. Continental and Sichuan Chengfei Integrated Technology Co., Ltd. established a joint venture through their subsidiaries to develop and produce 48V battery systems. The world's first P2 hybrid module of Schaeffler was officially put into production in Jiangsu Taicang manufacturing base... In the future, which or which hybrid technology routes will become new "outlets"? Facing the new market and policy environment, how will enterprises make choices? These will become the focus of the component field.

Market development returns to rational technical route step by step

Since this year, the automotive intelligent networking field has become less restless and has begun to return to rationality. A large part of the reason is that Tesla and Uber have had several autonomous driving traffic accidents, which has sounded the alarm bell for the rash progress in this subdivision field.

In China, the strong push at the policy level is still playing a role. In January, the National Development and Reform Commission released the Innovative Development Strategy for Smart Cars (draft for comments) on its website, which clearly stated that China's smart cars should take three steps.

By 2020, the technical innovation, industrial ecology, road network facilities, regulations and standards, product supervision and information security system framework of China's standard intelligent vehicles will be basically formed. Medium and high level intelligent vehicles have achieved market-oriented application, and the demonstration operation in key regions has achieved results. The construction of intelligent road transportation system has made positive progress. The coverage of vehicle wireless communication network (LTE-V2X) in big cities and highways has reached 90%, and Beidou high-precision space-time services have achieved full coverage.

By 2025, the technical innovation, industrial ecology, road network facilities, regulations and standards, product supervision and information security system of China's standard intelligent vehicles will be fully formed. New cars are basically intelligent, and high-level intelligent cars are applied in a large scale. The "people vehicle road cloud" has achieved a high degree of collaboration, and the new generation of vehicle wireless communication network (5G-V2X) basically meets the development needs of intelligent vehicles.

By 2035, China's standard smart cars will enjoy a global reputation, take the lead in building a smart car power, and the whole people will share the "safe, efficient, green and civilized" smart car society.

On the other hand, BAT and many start-ups began to take a gradual development path, and the first thing to ensure is traffic safety. On July 4, Baidu Apollo released version 3.0 of Apollo, announcing that the world's first L4 mass production autonomous bus, "Apollon", was officially put into mass production. In the use scene, it was only on the relatively closed park road, not the open road.

Not only BAT, but also startups have a clearer understanding of the development of intelligent networking technology. For the time being, regardless of L3 and L4, it is extremely important to deal with L0 ～ L2. As the president of a company said, "The current market demand for L0~L1 automatic driving mass production products is very strong, and it is a pragmatic choice to participate in market competition step by step."

In addition, the development of test standards related to ICN has also been carried out in an orderly manner. Third party scientific research institutions, including China Automobile Center and Tsinghua University Suzhou Automobile Research Institute, are actively promoting the construction of ICN automobile traffic scene library with Chinese characteristics.