Today, let's look at the market space and growth rate of the new energy automobile industry.

Before discussing this issue, let's first think about a more essential question - what are the driving factors for the growth of the market size of new energy vehicles? Previously, we mentioned the internal logic of China's development of new energy industry, mainly from the supply level to carry out analysis. So from the perspective of consumers, along with the decline of subsidies mentioned in the previous chapter, people who did not originally have the need to buy cars have been continuously compressed in the past two years to buy low-mileage A00 class cars considering preferential policies such as licenses and subsidies. Others may have a small number of people choose to buy an additional new energy vehicle for more environmentally friendly emissions or a better and smoother driving experience; However, it is believed that the vast majority of people still choose a new energy vehicle after the first purchase demand, and choose a new energy vehicle after a comprehensive comparison between fuel vehicles and new energy vehicles.

Therefore, from the future medium and long term (here mainly refers to within 10 years to around 2025, the proportion of shared travel may be structural changes due to the maturity of intelligent driving and other technologies in the longer term), the growth logic of new energy vehicles is mainly the replacement of traditional fuel vehicle market space, rather than new increment. Therefore, the decision to drive the size of the new energy vehicle market mainly depends on two factors - car ownership and penetration rate of new energy vehicles.

First of all, look at the number of cars, according to the Ministry of Public Security traffic Bureau official data show that as of the end of June 2018, the number of cars reached 229 million, and the number of people reached 166, while in 2004, the number of people was only 20, and the industry compound growth rate was as high as 17%. The level of 166 vehicles per 1000 people does not need to be compared with traditional developed countries such as the United Kingdom 519 vehicles, Germany 572 vehicles, Japan 591 vehicles, the United States 797 vehicles, compared with South Korea, Brazil, and even Thailand 376 vehicles, 249 vehicles, 206 vehicles are still a certain gap, China's future car ownership there is still a lot of room for improvement.

However, when it comes to the growth rate, taking Japan and South Korea, where automobile consumption habits are closer to our country, as an example, when 1,000 people have reached 140 units, it is the central watershed of sales growth rate, and China reached this level at the end of 2016, followed by a corresponding decline in growth rate in 2017. In 2016, China's auto sales increased by 13.7% year-on-year, reaching 28.03 million, and in 2017, China's auto sales were 28.8889 million, an increase of 3.04%, the growth rate was 10.61 percentage points lower than the same period last year. Therefore, if the calculation is based on the historical average of 5% compound growth rate of Japan and South Korea in the corresponding stage, the sales volume is expected to be about 30 million in 2018, and the sales volume will be close to 43 million in 2025. The number of thousand people will increase from 166 to about 250 by 2025, when China's population will remain at about 1.4 billion if it does not consider the continued liberalization of three-child and other factors, and the number of cars in 2025 is expected to reach about 350 million.

Looking at the penetration rate of new energy vehicles, the sales data of new energy vehicles in 2017 were 777,000, accounting for 2.69% of the total car sales of 2.887.89 million; In the first half of 2018, the sales volume of new energy vehicles was 412,000, with a penetration rate of 2.93% of the total sales volume of 14.0665 million, and the annual estimate is about 1.1 million.

If the penetration rate of new energy vehicles reaches 20% in 2025 according to the Medium and Long-term Development Plan of Automobile Industry issued by the Ministry of Industry and Information Technology, the production and sales level of new energy vehicles will reach 8.53 million units according to the 43 million units assumed above, with a compound growth rate of 34.00%. If the conservative point is estimated, in 2025, if the sales proportion is 15%, the production and sales will also be about 6.4 million, with a compound growth rate of 28.60%.

By the end of 2017, the number of new energy vehicles in China was 1.53 million, accounting for 0.7% of the total number of vehicles. By the end of June 2018, the number of new energy vehicles reached 1.99 million, and the penetration rate rose to 0.87%; According to our calculation above, it is expected that by 2025, the ownership of new energy vehicles will be close to 30 million, and the penetration rate will reach about 8.5%.