All parties are vying for the "big opportunity" in the new-energy vehicle aftermarket.

With the rapid adoption of mobile internet and continued growth in production and sales, the new energy vehicle aftermarket presents enormous opportunities while also demanding a more comprehensive supporting system. Recently, BYD has begun considering the insurance market. In March of this year, the State Administration for Market Regulation released a company name registration announcement, listing "BYD Insurance Brokerage Co., Ltd." Coincidentally, NIO established NIO Insurance Brokerage Co., Ltd. in January of this year, following similar moves by Xpeng Motors and Tesla. Many industry insiders believe that with the increasing digitalization and intelligence of vehicles, automakers have a significant advantage in pricing, underwriting, and risk management for auto insurance, leveraging their data capabilities. Currently, obtaining insurance company licenses is difficult, leading many automakers to opt for insurance brokerage licenses as a starting point. They may also collaborate closely with licensed insurance companies on product design and development to unlock greater market value.

This is a microcosm of the rapid development of my country's automotive aftermarket in the internet age. Beyond auto finance, online and offline car service platforms are also experiencing rapid growth. Earlier this year, Tuhu Auto Care, which offers both online appointment bookings and offline auto repair services, officially submitted its application for a Hong Kong listing. According to the prospectus, Tuhu Auto Care's operating revenue in 2019 and 2020 was 7.04 billion yuan and 8.753 billion yuan, respectively. From January to September 2021, it generated operating revenue of 8.442 billion yuan, a year-on-year increase of 41.76%. "With the rapid growth of new energy vehicles, my country's car ownership will continue to rise, and is expected to exceed 400 million vehicles in the next few years, further expanding the automotive aftermarket," said Li Baohua, a professor at Tsinghua University's Shenzhen International Graduate School.

After moving to Shenzhen for work, Zheng Yanyan, a teacher at Shenzhen High School, and her husband, were struck by the high penetration rate of new energy vehicles in this innovative city. Considering factors such as registration convenience, purchase cost, and vehicle usage scenarios, Zheng Yanyan purchased a green-licensed "Yue B" new energy vehicle in Shenzhen, selling her six-year-old gasoline car. The latest data released by the Ministry of Public Security shows that China's car ownership reached 302 million in 2021, with 26.22 million new vehicles registered that year. Among them, the number of new energy vehicles reached 7.84 million, an increase of 2.92 million compared to 2020, excluding scrapped and deregistered vehicles, a 59.25% increase. "With annual sales of at least 20,000 to 30,000 yuan per vehicle, the automotive aftermarket will continue to grow rapidly," said Yao Weibing, Chairman of Guangzhou Mingluo Equipment Co., Ltd. A third-party agency estimates that the size of my country's automotive aftermarket may approach 10 trillion yuan by 2026.

The industry believes that with the increasing energy density of power batteries, the widespread deployment of charging stations, and the rapid application of autonomous driving technology, automotive intelligence is developing at a speed similar to Moore's Law for integrated circuits, driving explosive growth in the automotive aftermarket. However, this market still faces multiple concerns. For example, as a key component of the new energy vehicle industry, the recycling of retired batteries carries hidden risks. Reporters learned that many OEMs have established battery recycling operations, but digital traceability capabilities are still lacking.

Due to multiple factors, many retired power batteries in the industry are not flowing into formal channels. Instead, they are "snapped up" at high prices by small factories with unqualified qualifications and low environmental protection costs. "Due to cost constraints, many legitimate automakers and battery processing companies face difficulties recycling retired power batteries," said Zhang Zheming, an associate researcher at the Shenzhen Automotive Research Institute of Beijing Institute of Technology. Furthermore, the supply of retired power batteries is fragmented, and a comprehensive battery recycling system has yet to be established in China, making centralized collection of retired batteries difficult. The high cost of long-distance transportation also presents challenges for automakers and recycling companies. "Automobiles are transforming from mechanical products to intelligent and connected vehicles, which will directly drive changes in insurance services, repair parts, recycling and disassembly services. Emerging software and data services such as autonomous driving software, smart cockpit applications, and vehicle usage data are also developing rapidly." Yao Weibing stated that the demand for talent in software programming, new materials and manufacturing process research and development, and digitalization is also growing.

Currently, the industry is experiencing a certain degree of talent shortage. Statistics from the China Automobile Maintenance and Repair Industry Association show that the proportion of senior technicians working in China's auto repair industry was 5.7% in 2020, far lower than in some developed countries. Various new car manufacturers are venturing into the "risk" sector. Internet companies like Tencent and JD.com are expanding into car rentals, and used car platforms are experiencing rapid growth. While the automotive aftermarket continues to expand in the internet era, it also faces increasingly fierce brand competition and market dominance.

Many industry insiders believe that internet technology will reduce information asymmetry. As the marketing market continues to standardize, the industry will prioritize user experience and gradually enter an era of marginal profits. Furthermore, the gradual advancement and improvement of autonomous driving technology will bring about continuous changes in the automotive aftermarket. For example, insurance policies and clauses supporting autonomous driving may change, the role of auto repair shops may be weakened, and the upgrade and maintenance of autonomous driving systems may become more important.

In February of this year, several autonomous light trucks began operating in Shenzhen's epidemic prevention and control efforts. Each vehicle could transport over 500 boxes of supplies and over 10,000 pieces of anti-epidemic supplies daily. According to a representative from autonomous driving startup Yuanrong Qixing, these autonomous light trucks, which integrate sensors such as lidar, cameras, and integrated navigation, were responsible for distributing epidemic prevention supplies within the designated control area of ​​Shatou Subdistrict in Shenzhen's Futian District during the epidemic, serving 12 epidemic prevention workstations. Furthermore, the power battery recycling system urgently needs to be improved and strengthened. The extended producer responsibility system for power battery recycling needs to be strengthened. At the same time, regulations should be strengthened to combat illegal and improvised power battery assembly, and red lines should be set regarding safety and environmental issues in power battery recycling.

A GAC Group representative suggested improving traceability and supervision of retired batteries, starting from battery production, through vehicle use, battery retirement and recycling, cascade utilization, cascade battery recycling, and ultimately, recycling. Li Baohua stated that the "Implementation Plan for Accelerating the Comprehensive Utilization of Industrial Resources" and other policy documents should be implemented as soon as possible to improve the waste power battery recycling system, accelerate the promotion of upstream and downstream industry chain collaboration to jointly build recycling channels, and establish a cross-regional recycling system.

Reprinted from Sina Auto

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