What bottlenecks still need to be overcome?, Accelerating the entry of new energy vehicles into the rural market models | facilities | market

Xinhua News Agency, Beijing, September 7th (Xinhua) - Question: What bottlenecks still need to be overcome when new energy vehicles accelerate their entry into the rural market?

Journalists Huang Xing and Xiang Dingjie from Xinhua News Agency's "Xinhua Perspective"

"Buying a new energy vehicle now is very cost-effective, with discounts of tens of thousands of yuan including various preferential policies. The car is environmentally friendly, has good range performance, and is economical. Recently, Cao Fuping, a villager from Guangshun Town, Changshun County, Guizhou Province, bought a Geely Galaxy L7.".

According to a survey by Xinhua Vision reporters, with policy support, new energy vehicles are accelerating their entry into the rural market. However, in some regions, there are still problems such as incomplete charging pile facilities and the need to improve the adaptability of vehicle models. It is still necessary to accelerate the construction of charging facilities, enrich rural vehicle models, and improve support policies to help new energy vehicles go to rural areas.

New energy vehicles accelerating their entry into rural markets

Walking in many rural areas, one can occasionally see new energy vehicles with green signs whizzing past.

Entering the charging station in Fuhuan Town, Qijiang District, Chongqing, car owner Liu Gang is charging his Jihu car. Last year, Liu Gang spent more than 220000 yuan to buy this car. "It only takes over an hour to charge 80% of the battery, and each charge is less than 1 yuan, which is convenient and affordable. The driving experience of electric cars is also great," Liu Gang said.

The picture shows a car owner charging their car at the Fuhuan Town charging station in Qijiang District.

Ye Peng, Deputy General Manager of State Grid Chongqing Qijiang Power Supply Company, told reporters that in 2022, the company invested 300000 yuan to build a charging station in Fuhuan Town; After the charging station was put into operation, the number of new energy vehicles in the town has gradually increased to more than 40, and many villagers are still continuing to purchase new energy vehicles.

In recent years, a series of policies have been introduced to encourage new energy vehicles to go to rural areas. In July 2020, the Ministry of Industry and Information Technology, the Ministry of Agriculture and Rural Affairs, and the Ministry of Commerce jointly issued a notice requiring the organization of activities to bring new energy vehicles to rural areas. In June of this year, the Ministry of Industry and Information Technology and other departments launched the 2023 New Energy Vehicle Campaign to the Countryside, which will continue until December this year, with a total of 69 new energy vehicle models participating.

Xie Guang, Senior Director of the Strategic Planning Department of Changan Automobile, said that Changan Automobile has 7 vehicles selected for this year's new energy vehicle going to the countryside catalog. In order to increase sales, the company has launched multiple preferential policies, such as offering a discount of 12000 yuan for the best-selling model, the Benben E-Star, and a direct reduction of 30000 yuan for another model with a lifetime warranty of "three batteries".

The accelerated improvement of charging infrastructure also helps pave the way for new energy vehicles to go to rural areas. Data shows that in 2020, the number of individual charging stations installed by residents in Qijiang District, Chongqing was only 24. In 2022, the new increase has reached 515 households, and this year it has reached 586 households. 86% of townships in Guizhou have built charging facilities, and Chongqing is expected to achieve full coverage of all township charging facilities by 2025.

According to data released by the China Association of Automobile Manufacturers, the sales of new energy vehicle models in rural areas increased by 80%, 169%, and 87% year-on-year in 2020, 2021, and 2022, respectively, driving the cumulative sales of over 4.1 million new energy vehicle models in rural areas. The industry expects that the sales volume of new energy vehicles going to rural areas will continue to rise this year.

Popularization still needs to overcome three obstacles

Despite the continuous increase in sales of new energy vehicles in rural areas, the penetration rate in rural areas is still relatively low. According to data from the National Passenger Car Market Information Joint Conference, in March this year, the penetration rate of pure electric passenger cars in counties and townships was 16%, and the penetration rate of plug-in hybrid passenger cars in counties and townships was 8%.

Industry insiders believe that in order for new energy vehicles to enter the fast lane in rural areas, multiple problems still need to be solved.

——The charging facilities need further improvement. The reporter learned from the interview that the current rural new energy vehicle market is still in the early stage of popularization, and the construction of charging facilities in rural areas is still relatively lagging behind. There are problems with low social investment willingness, difficult profitability, and difficult equipment maintenance in the construction of charging piles.

"There are too few charging stations and they often need to be found," said a new energy vehicle owner in Longshan Town, Longli County, Guizhou Province. Local public charging stations are often unusable, and it is common to run 10 to 20 kilometers for charging. Zhang Le, a resident of a township in Chongqing, told reporters that he once wanted to buy a new energy vehicle, but due to concerns about inconvenient charging, he ultimately chose a gasoline powered car.

——The vehicle model and price should be more suitable for the needs of rural consumers. Rural residents are relatively sensitive to prices, and a considerable number of people tend to purchase new energy vehicles worth less than 70000 yuan. Every year, small and micro cars are also the main types of vehicles used in rural areas.

Some rural residents prefer affordable elderly transportation vehicles. Wang Ping, the village branch secretary of Haima Kong Village in Xiuwen County, Guizhou Province, said that almost every household in the village has elderly transportation vehicles. "Although elderly transportation vehicles have safety hazards, they are indeed cheap and have a low threshold for use."

According to the interviewed car salesperson, some micro new energy vehicles are selling well, but currently there are relatively few new energy vehicle models that can cater to various usage scenarios such as rural transportation and agricultural production.

——The sales service system needs further improvement. The reporter learned that the traditional fuel vehicle dealer system is deeply rooted, and there are usually 4S stores or dealer channels in county towns. However, new energy vehicles often adopt online booking and new direct sales models, and the dealer system of car companies in county towns is not perfect, which leads to underdeveloped new energy vehicle finance, insurance, used car and after-sales, maintenance and other businesses.

Taking multiple measures to smooth out "bottlenecks"

Industry experts believe that compared to cities, the rural new energy vehicle market will still be a blue ocean. According to the "Research on Electric Vehicle Travel in Rural Areas of China" released by the China Electric Vehicle Hundred People Association, it is expected that by 2030, the number of electric vehicles per thousand people in rural areas of China will be nearly 160, with a total number of vehicles exceeding 70 million, and the market size may reach 500 billion yuan.

Xu Haidong, Deputy Chief Engineer of the China Association of Automobile Manufacturers, suggested that continuous efforts be made to improve public charging facilities, enrich rural vehicle models and support policies, and accelerate the assistance of new energy vehicles in rural areas.

Firstly, we will focus on building public charging facilities. The relevant person in charge of State Grid Chongqing Electric Power Company suggests prioritizing the installation of public charging facilities in county-level and township enterprises, commercial buildings, transportation hubs, and other places. At the same time, we will accelerate the transformation of charging facilities construction conditions in existing rural residential communities according to local conditions, and implement the requirements for the construction of charging infrastructure in new residential communities.

The first photovoltaic charging station in Chongqing, which has been completed and put into use, was photographed on June 16, 2022. Photo by Xinhua News Agency reporter Liu Chan

"Rural areas often adopt a 'one household, one courtyard' residential form, and we can actively explore an integrated charging model of 'photovoltaic+energy storage+car charging'." Xie Guang said. The reporter found in the interview that this model has been implemented in scenarios such as highway service areas, but it is still rarely applied in rural residents' homes.

Secondly, we should accelerate the enrichment of the supply of rural products. Xu Haidong suggests encouraging new energy vehicle companies to develop more economical, practical, and marketable models based on the characteristics of rural consumers, especially for products such as cargo micro trucks, micro trucks, and light trucks. Given that rural consumers do not have high requirements for range, it is possible to reduce the number of batteries carried to lower costs and prices.

In addition, we need to guide new energy vehicle companies to sink into sales and service networks. Associate Professor Lin Yun and others from Chongqing University suggest guiding car companies and third-party service enterprises to accelerate the construction of joint business outlets in rural areas, establish a supporting after-sales service system, regularly carry out maintenance and after-sales service activities in rural areas, and provide emergency rescue services.