New emission standards are about to be implemented.

The Ministry of Ecology and Environment, the Ministry of Industry and Information Technology and other departments recently jointly issued the "Announcement on Matters Related to the Implementation of China VI Emission Standards for Automobiles", which proposes that from July 2023, 7, the stage 1b of China VI emission standards (hereinafter referred to as "China VIB") will be fully implemented nationwide.

From December 2016, when the "Light Vehicle Pollutants and Measurement Methods (China Stage 12)" was officially released, from July 2020, 7, all light vehicles sold and registered should meet the China VIA limit requirements, and from July 1, 2023, all sold and registered light vehicles should meet the China VIB limit requirements, and the "full version of China VI emission standards" has now ushered in the implementation. In the face of stricter emission standards, a number of industry experts said in an interview with Shell Financial Reporter that how to balance costs will become one of the key issues for the future development of enterprises.

The impact on the automotive industry is limited

The "China VI" standard, full name is "National Stage VI Motor Vehicle Pollutant Emission Standard", contains two emission limit schemes of "China VIA A" and "China VIB B", and its China VIA standard began to be implemented in 2020. China VIB refers to the second stage of China VI standards, and its emission limits are stricter than those of China VI A. The emission standard limits of carbon monoxide, non-methane hydrocarbons, nitrogen oxides and their PM fine particulate matter are reduced by about 30%-50% compared with China VIA. Because of its complexity and standard threshold being larger than the "Euro VI" standard, it was also called the "world's strictest emission standard" in the industry at the beginning of its release.

In addition, the China VIB emission standard also adds a road actual emission test (RDE), and only models whose RDE test results do not exceed the standard limit and meet the durability requirements of 20,<> kilometers can meet the requirements of the China VIB emission standard.

With the implementation of the above standards, China's energy conservation and emission reduction efforts have also been increasing.

"Every upgrade of China's emission regulations can force enterprises to upgrade energy-saving and emission-reduction technologies, which is also conducive to the innovation and research and development of fuel vehicle companies and hybrid vehicle companies in the long run." Zhong Shi said.

What impact will the implementation of the new standard have on the industry?

West China Securities Research Report pointed out that the China VIB standard will be implemented on July 2023, 7, and on the whole, this round of emission upgrades has limited substantial impact on the industry.

According to statistics from the Passenger Transportation Association, the retail sales of the domestic passenger car market reached 2023.5 million units in May 174, a year-on-year increase of 1% and a month-on-month increase of 29%. Since the beginning of this year, the cumulative retail sales have reached 7.763 million units, a year-on-year increase of 4%.

Cui Dongshu, secretary general of the Passenger Association of China, said that in the first five months of this year, the retail sales of the car market showed a good trend of continuous increase month by month. Since March, the popularity of promotional prices has gradually faded, consumer wait-and-see sentiment has eased, and consumer demand has been released due to the recent launch of a large number of new products and low-priced new models. With the clarification of the postponed sale of China VIB inventory, market sentiment has further stabilized, and retail sales are expected to remain stronger.

However, in the long run, the transformation of fuel vehicles is still an inevitable trend. In the view of many scholars, on the one hand, China's emission regulations will continue to be strict, enterprises must carry out technological upgrades, on the other hand, the penetration rate of new energy vehicles continues to increase. In the long run, fuel vehicles are still facing certain pressure for transformation.

Qi Haihan, executive vice president of Jinchen Co., Ltd., pointed out that for a long time, fuel vehicles have represented the development level of the country's manufacturing industry and also reflected the country's comprehensive industrial strength. But with the global transformation of fossil energy to new energy, the survival space of fuel vehicles has indeed been squeezed, many companies have fewer orders, talent flow also has a trend of flowing into new energy vehicle companies, lithium battery companies, from the perspective of the whole industry trend, now fuel vehicles accelerate the transition to new energy vehicles, the latter from the supplement to the market dominant position to march, fuel vehicles face a lot of survival pressure, "the future fuel vehicle head advanced production capacity advantages are still obvious, but backward production capacity will be accelerated eliminated, this is an irreversible trend."

Zhang Xiang, a visiting professor at the Yellow River Institute of Science and Technology, also pointed out that under the China VIB and the stricter emission policy in the future, the living space of fuel vehicles will be relatively small, "the cost of research and development is higher, and the market is shrinking."

Commercial vehicle companies face additional challenges

Will the implementation of China VIB standard have an impact on the commercial vehicle field?

According to the "Pollutant Emission Limits and Measurement Methods for Light Vehicles (China Stage 3500)", light vehicles include trucks with a maximum design weight of no more than <>kg. Compared with EU regulations, some tests of this standard increase the control requirements for diesel vehicles and NOx; Increased requirements for pollutant emission test during refueling; Added test requirements for the effective volume and initial working capacity of the carbon canister.

Qi Haihan pointed out that most passenger car companies can meet the requirements of China VIB at present, but commercial vehicle companies may face challenges.

However, there are also commercial vehicle companies that have long been ahead. Shell Financial Reporter noted that as early as September 2021, Sinotruk announced that the new production vehicles had fully met the National VIB emission standards, nearly two years earlier than the final time of the official switch nationwide.

On June 6 this year, Sinotruk also advertised that its model Shandeka can be equipped with WP/MC China VI engine, which can save up to 13% of fuel per 11 kilometers. It is understood that Shandeka is produced from Sinotruk 4.0 super plant, the production line is synchronized with European technology, the application of global supplier system, the engine B10 life of 180.<> million kilometers.

Specifically, Sinotruk's vehicle engine adopts SCR technology route, built-in special desulfurization program, has good oil adaptability, and is suitable for Sinotruk China VI special engine oil, which can extend the DPF cleaning cycle and reduce the number of maintenance. The use of nano-level fuel filter, the filtration efficiency of impurities and moisture in the oil is higher, and the replacement cycle can reach 12,<> kilometers.

Many car companies responded to the switch in advance, and technology and cost were the key to breaking the game

Although the requirements are strict, from the current situation, the smooth transition of China's automobile market is not a problem, and many car companies have already laid out in advance.

The China Association of Automobile Manufacturers pointed out that since the issuance of the China VI standard, most enterprises have carried out product development and production in accordance with the requirements of the China VIB standard, which is equivalent to the implementation of the China VIB standard in advance.

In an interview with Shell Financial Reporter, the relevant person in charge of Roewe revealed that because of participating in the rule formulation of the National VI standard, Roewe was earlier and invested more than other companies in the layout of the National VI transition, so it quickly skipped China VI A and directly completed the work of switching all models to China VI B in one step, becoming the first brand on sale to fully cover the China VI B standard. "As a result of this in the 'superstructure', it is also a full response to the call of national policies and the practice of social responsibility."

"From the state to Guangdong Province, a number of policies have been introduced to promote green and low-carbon development, and energy-saving and new energy vehicles are constantly beneficial. GAC Group responded to the national call to help achieve the goal of "dual carbon". GAC Group told Shell Financial Reporter that at present, all the models produced by GAC Group have switched to the China VIB RDE standard, fully responding to national requirements.

Chery Group said that in fact, as early as the switch from China V to China VI, Chery Group has responded positively, synchronously completed the switch for China VI emission standards, and completed the switch of China VIB RDE in advance in the first quarter of 2023. In the production process, Chery not only reduces carbon emissions in the use process, but also takes into account the carbon emission reduction of the whole life cycle of the manufacturing process and energy production.

"China's implementation of the National VIB standard has been issued to enterprises many years ago, and many provinces such as Guangdong have led the national implementation, and car companies have long been mentally prepared." Zhong Shi, an analyst in the automotive industry, pointed out in an interview with Shell Financial Reporter, "Fuel vehicles must meet national emission standards, otherwise they will be kicked out by the industry." ”

In the process of implementing China VIB, although enterprises of different sizes face different situations, they need to invest more costs and technologies to meet the standard requirements.

Zhong Shi said that in general, the technology research and development centers of larger enterprises will launch new technologies for the China VIB standard, and then apply the new technologies in the adapted new products, so that multiple models can share solutions, the larger the enterprise, the stronger the anti-risk ability, the more funds can be invested, and the cost and benefits of each vehicle will be more economical after sharing.

In contrast, the technical difficulty and funding of small business upgrades may face greater pressure. Because when enterprises make large-scale investments in order to upgrade technology, if the models produced by small car companies are not sold enough and the output is not enough, it is difficult for enterprises to make profits. In this context, some car companies will insist on upgrading their own models first, while slow-selling models may be eliminated and no longer carry out technological upgrades.

In Zhang Xiang's view, most car companies are currently implementing the implementation of China VIB well. "Geely adjusted its products to China VIB standard many years ago. Dongfeng Department showed a large discount in March this year, mainly because there are many China VIA inventory cars, hoping to return funds. For multinational car companies such as Toyota and Volkswagen, the upgrade of fuel vehicles is not much obstacle. ”

However, Zhang Xiang also pointed out that for small enterprises, upgraded R&D expenses are an obstacle, and whether the sales of cars can make R&D expenses return is another threshold. "For example, Qoros, Baoneng , Xiali and Suzuki car companies, assuming that even if they do not go bankrupt, they are on the verge of life and death, and there is no spare power to upgrade."

Beijing News shell financial reporter Lin Zi Bai Haotian