– Support from the central government will accelerate the expansion of the electric vehicle market
– Shaanxi’s EV sales surge, 65 percentage points higher than the national average
– Research on LFP batteries is essential to enter the market
Accelerating green growth strides, a bigger task for Shaanxi, which relies heavily on coal
On September 2020, 9, President Xi Jinping mentioned in a video address to the United Nations General Assembly that he would achieve carbon neutrality by 22. This is the first time that China has set a specific target and year for reducing carbon emissions. It would be right to see this comment as an expression of confidence that it is possible to fulfill its responsibilities simply as a member of the international community, and the foundation of this confidence is the rapid technological development and the experience accumulated during the 2060 period.
In fact, China succeeded in achieving most of the environmental indicators stipulated in the 13.5 Plan. In a briefing by the State Council on October 2020, 21, China's Vice Minister of Ecology Yingmin Zhao Ying-min told the State Council that the rate of energy use reduction, forest restoration rate, and fine dust did not meet the standards. Indices such as cities and ozone reduction rates have been achieved, and the reduction rate of carbon dioxide emissions per unit GDP in 2019 decreased by 15% compared to 18.2, declaring that China has already passed the period of rapid carbon dioxide emission. However, in 2007, with the rapid pace of development of western manufacturing, Shaanxi's carbon emissions increased at a rapid pace. Energy consumption has increased rapidly to satisfy the demand for electricity supply due to the increasing number of manufacturing factories and the number of permanent residents, and coal power has been used to fill most of the energy demand based on abundant underground resources and well-equipped coal mining facilities in the Sanbei region. Accordingly, it can be seen that Shaanxi's demand for the development of eco-friendly industries is much greater.
<Total energy consumption in Shaanxi Province in 2009-2019>
(Unit: XNUMX tons of standard coal equivalent (TCE))
Renewable energy vehicles: a starting point for eco-friendly power generation
The sector in which the government's efforts for green growth are most visible is the automobile sector. The sector where Shaanxi's efforts for growth are most visible is the automobile sector. The Chinese government announced the <Eco-friendly Automobile Industry Development Plan> to increase the proportion of electric vehicles to 25% of total vehicle sales by 20, reduce the average power consumption of electric vehicle batteries to 25kWh per km by 12, and It has announced that it aims to fully convert to electric vehicles and to transition to an autonomous driving system. In addition, the plan aims to replace 2022% of public transport and taxi vehicles with electric vehicles by 80, and will provide tax and fiscal policies for mergers between electric vehicle-related companies and industrial restructuring.
Based on the Xi'an City government's three-year action plan (3-2018) for clearing smog and keeping the blue sky announced earlier, all taxis and public transportation vehicles in Xi'an were converted to electric and methanol vehicles in 2020, and 2019 Mid-size and heavy-duty diesel trucks with emission standards below G2020 (國Ⅲ) were withdrawn from 3, and production of vehicles with G7 (國V) emission standards was suspended in July 5. As a result, the automobile industry has a direct impact on the rise and fall of each industry sector due to government policies. It is regarded as a representative area of influence.
In addition, thanks to the continuous efforts to attract new and renewable energy vehicle manufacturers since the announcement of the <Xian City New Energy Vehicle Application Expansion Implementation Plan> It has a manufacturing base in the province. According to Liu Bo (刘波), deputy director general of Shaanxi Provincial Public Office, as of 2020, there are 60 finished automobile enterprises in Shaanxi Province, and 2 automobile parts companies and second- and third-tier suppliers, of which the annual output is 3 billion yuan (Hanwha). 1,000 companies were valued at about 10 billion won), 1,700 were worth 20 billion yuan (about 100 trillion won), and 1 were worth 7,000 billion yuan (about 4 trillion won). It is said
<Vehicle production by car company entering Xi'an in 2018*>
Among them, Shaanxi Motor Company (陕汽) produces the largest natural gas heavy-duty truck production in China, Kaiwo, established in 2018, specializes in hydrogen vehicle production, and Xi’an BYD is the largest new and renewable energy vehicle production base in Korea. So far, it is focusing on the production of new and renewable energy vehicles, such as producing a total of 40 new and renewable energy (electric vehicles).
In addition, in May 21, the policy to encourage the purchase of renewable energy vehicles was announced, and the renewable energy subsidy and purchase tax exemption policy was extended until the end of 5, and through this, each city/district local government announced that businesses that purchased new and renewable energy buses When purchasing a first car, additional subsidies can be provided to households that have purchased a renewable energy vehicle. (At the level of $2022 per vehicle) Of course, the Chinese government's subsidy policy for new energy vehicles is gradually decreasing. The Chinese government was scheduled to cut subsidies for new energy vehicles (pure electric, hybrid, and fuel cell) starting in June 1,439 and abolish all subsidy systems in December 2019, but sales fell for five consecutive months in the second half of 6 and the COVID-2020 As a result, sales of electric vehicles in January 2019 fell by about 5% and sales in February by 2020%. decided to keep However, the size of the subsidy is gradually decreasing, and as of 1, a 54% reduction in the subsidy was re-determined.
However, this is a measure as China's electric vehicle market has entered a mature market that occupies 50% of the global electric vehicle market. Expensive vehicles such as the rival Weilai EC34 (5,770 yuan on a government subsidy basis, about 6 million Korean won) are appearing in the market one after another. Although the subsidy has decreased, it can be seen that the growth potential is gradually increasing.
Shaanxi's New Renewable Energy Vehicle Purchasing Speed Increased By 245% Year-on-year
According to a recent public application announcement, as of the third quarter of '21, the cumulative sales of new and renewable energy vehicles in Shaanxi Province increased by 3% to 14 units, which is 1,000 percentage points higher than the national average. Considering that the total vehicle sales in Shaanxi Province was 254.5 units as of the third quarter, the sales share of new and renewable energy vehicles reached 65%. It can also be seen that consumers' psychological acceptance of new and renewable energy vehicles is very high compared to other regions.
In addition, in September 2020, the Ministry of Finance, Ministry of Finance, Ministry of Science and Technology, and Development Committee issued <Notice of State Energy Administration on Pilot Application of Fuel Cell Vehicle>, Announcement of policy to expand support for hydrogen vehicles to provide subsidies of up to 9 billion yuan (approximately 2 billion won) and 15 million yuan (2,546 billion won) respectively in the two fields of 'expanding the application of hydrogen vehicles' and 'supplying hydrogen energy' As a result, the pace of hydrogen power generation in Shaanxi Province is also accelerating. Northwest China, including Shaanxi Province, is an area where chemical companies are concentrated, and a large amount of hydrogen is generated as a by-product of chemical processes. In addition to initial coal, processes such as chlor-alkali are taking place in Shaanxi, Xinjiang, Ningxia, etc., on sites with an area of about 2 million cubic meters. . Accordingly, Shaanxi Province's Weinan, Baoji, Yan'an, and Yulin cities, where chemical companies using hydrogen as a by-product are concentrated, are relatively easy places for hydrogen development companies to move in. It can be seen as having an investment environment.
In addition, Shaanxi Province, which has one of China's three largest air bases, has also started manufacturing hydrogen fueled aircraft. 3 Hydrogen energy development research work is jointly conducted, and in the process, it also has demand in the field of hydrogen aircraft, such as establishing an industry-university cooperation model with Western Electric Power (西电).
Implications: Need to develop appropriate technology to target the emerging renewable energy market
The technological level of Korean electric vehicle battery makers is quite high. However, in order to penetrate the Chinese market, battery technology suitable for the Chinese market is required. Mainstream electric vehicle makers in China are using LFP batteries, also called lithium iron phosphate batteries. Of course, ternary NCM batteries are also adopted for high-end models, but LFP still dominates the market.
<Types of batteries used by major Chinese electric vehicle manufacturers>
In the past, LFP batteries, which were called synonymous with low technology, have received market demand and government support based on low prices and high fire safety. The deterioration problem is also being supplemented through solutions such as installing additional heat packs, and it is emerging as the mainstay of the electric vehicle market with high cost-effectiveness. In particular, the export market for electric vehicles equipped with LFP batteries is expected to expand significantly as the technology patents for LFP batteries expire at the end of next year. Accordingly, Korean companies considering entering the Chinese market will also need to cooperate through R&D on LFP batteries or joint ventures with companies with related technologies. Meanwhile, in relation to hydrogen energy development, as the development of a hydrogen industrial complex in Yulin City, Shaanxi Province, is approaching, the local technology demand for coal by-products into energy, hydrogen energy storage, transportation technology and energy operation is also very large. attention is needed
Source: 2020 Shaanxi Provincial Statistical Yearbook, Shaanxi Provincial Automobile Manufacturers Association, local media and KOTRA Xi'an Trade Center