Redefine the permeability of new energy vehicles: revise the permeability of “15.6%” in the traditional definition into two parts: “11.9% +?”. Market penetration = existing sales / potential demand. This study carefully disassembles the differences between A00 and other levels, and looks at them separately: 1) the penetration of A00 level is mainly based on incremental market + stock substitution, and the core is to grasp the denominator end (demand expansion). Roughly, the penetration rate of this market is only 25% – 30% in 2021. 2) Penetration beyond A00 level is mainly based on stock substitution + supplemented by incremental substitution, and the core is to grasp the molecular end (the supply of popular models drives sales). In 2021, the penetration rate was 11.9%. Considering that there is still an incremental market at the denominator, it is actually lower.
Why do we look at A00 market independently? 1. Compared with the overall market, A00 market is very independent. From 750000 to 230000 in 2010 to 980000 last year, the sales volume is separated from the growth rate and the overall market, accounting for 4.6% from 6% to 1%; 2. The electrification rate of A00 is 95% +, while that of other levels is 8% – 20%, forming a great contrast. We believe that A00’s product positioning is improved, and its low price is not low-end. The core is the blue ocean market that has exceeded 140 million “certified without car” groups. This year, it still maintains a high growth rate. If 5% stock substitution is completed in five years, the A00 market is expected to reach the order of 3 million in 2025.
Why should we expect the explosion of class a Bev? Class a vehicles are the most important segment of China’s passenger vehicle market, accounting for 55% – 60%. In 2021, the electrification rate of class a passenger vehicles was only 8.4% and that of pure electricity was only 5.7%. From A00 to B-level electrification process, there is a strong law for large single products to explore the market. We believe that we need enough brand influence + product power + appropriate price to create a real class a Bev explosion, to break through the current sales volume of 500000 vehicles such as Xuanyi, so as to bring a leap forward improvement in class a penetration. The probability of popular models will be the $25000 version launched by Tesla next year. Therefore, the penetration rate of new energy vehicles in the largest passenger car market will increase rapidly from 2023 to 2024.
Demand is resilient, and there is no need for “high penetration anxiety”. In 2022, a new round of production capacity launch cycle of the industrial chain will return to rational competition compared with last year, and most companies at the head of the industrial chain will have an output value of 10 billion and tens of billion. The pattern is relatively clear, so there is no need to worry about excessive competition. The core is that we see that the new energy vehicle market has entered a new stage driven by the market. The resilience of demand avoids the periodic fluctuation of the industrial chain between quarters in the era of subsidies. The supply and demand curve is relatively smooth, and the price elasticity switches smoothly to the sales elasticity. Neutral expects that under the sales volume of 5.6 million new energy vehicles this year, the penetration rate of new energy passenger vehicles other than A00 is only 18.7%, and that of pure electricity is only 11.6%. It should be noted that new energy vehicles will expand the whole vehicle market (incremental market) and complete high substitution (stock market), and the actual sales ceiling is much higher than the market cognition.
Be optimistic about the new energy vehicle sector and be a friend of time: the stage of the industrial chain from 0 to 1 has passed, and we no longer worry about the quantity in the process from 1 to 10. The core is that companies with barriers can cash in profits. Suggested focus: 1. Select the right company – leader: Contemporary Amperex Technology Co.Limited(300750) + Yunnan Energy New Material Co.Ltd(002812) , the pattern + profit is relatively determined and strong β； 2. Varieties with low valuation and good marginal pattern: Zhejiang Huayou Cobalt Co.Ltd(603799) , which is formed by ternary integration, Hunan Zhongke Electric Co.Ltd(300035) which has excellent power layout, are strong α； 3. Select the battery chain to be repaired with expected profit: Contemporary Amperex Technology Co.Limited(300750) , Eve Energy Co.Ltd(300014) etc; 4. New technology direction – for example, 4680 drives high nickel ternary chain ( Ningbo Ronbay New Energy Technology Co.Ltd(688005) , Beijing Easpring Material Technology Co.Ltd(300073) , Cngr Advanced Material Co.Ltd(300919) , Guangdong Fangyuan Environment Co.Ltd(688148) etc.), CNT Jiangsu Cnano Technology Co.Ltd(688116) , structural parts Shenzhen Kedali Industry Co.Ltd(002850) , etc.
Risk tip: the sales volume of new energy vehicles is lower than expected, the supply impact of the industrial chain, the rise of raw material prices, etc.
