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Since the start of 2017, the policies in the low-speed electric vehicle (LSEV) industry have consistently been favorable, drawing attention from both traditional car manufacturers and emerging players alike. This trend has seen even well-known internet-based carmakers losing ground to these seemingly simpler yet effective electric vehicles.
Recently, Great Wall Motor Co., Ltd. entered into a joint venture framework agreement with Hebei Yujie Vehicle Co., Ltd. Under this deal, Great Wall will inject capital and acquire a stake in Yujie, initially holding 25% of the shares, which could potentially rise to 49%. The new venture will operate under the brand name "YUJIE Great Wall," focusing on the production of pure electric vehicles.
Over the past year, Yujie's leadership had been in talks with several major car companies, including Great Wall and Beijing Automotive. While details remain undisclosed, it's clear that both Great Wall and Beijing Auto showed interest in collaborating with Yujie.
However, Beijing Automotive Group's BAIC New Energy division has been thriving in the pure electric vehicle sector, leading in sales. In early July, BAIC partnered with Daimler to invest $655 million in establishing a new production base and battery plant in Beijing. This move aimed at producing Mercedes-Benz branded electric vehicles further highlighted BAIC's dominance in the market. Consequently, Yujie found itself overshadowed by BAIC's advancements.
Great Wall’s strategy in the new energy sector has lagged compared to competitors like BYD, BAIC, and SAIC. Meanwhile, Geely's Emgrand EV has performed well, Chery New Energy secured independent qualifications, and Changan Benben EV saw significant sales in H1. On June 6, GAC Group announced plans to invest $60 million in setting up GAC New Energy Automobile Co., Ltd., aiming for a dedicated license in new energy passenger vehicles.
As an SUV specialist, Great Wall faces challenges due to stringent fuel efficiency regulations. The Ministry of Industry and Information Technology introduced measures requiring automakers to sell a certain quota of new energy vehicles to earn corresponding credits. These quotas are set to increase annually—reaching 8% in 2018, 10% in 2019, and 12% in 2020. Failure to meet these targets results in penalties. Additionally, the dual-point management method emphasizes that negative fuel consumption points can be offset by positive new energy points, but not vice versa, emphasizing the importance of new energy vehicles.
Under mounting regulatory pressures, Great Wall's decision to partner with Yujie appears strategic. Does this suggest that the low-speed electric vehicle industry is becoming more viable?
Out of the 15 "authorities for independent newly-built electric vehicles," the 14th spot went to Guangdong Luzhou New Energy Electric Vehicle Co., Ltd. (Lu Local Boat). Amidst the internet-based carmakers failing to secure any qualifications, Luzhou Local Boat—a prominent LSEV company in China—managed to gain approval for pure electric vehicle production.
Ironically, these low-speed electric vehicles triumphed over the self-proclaimed "Tesla" contenders in the race for credentials. Favorable policies for the LSEV industry persist. On July 17, the Ministry of Industry and Information Technology listed Yujie’s pure electric car product models under the "Announcement of Road Motor Vehicle Manufacturing Enterprises and Products" (No. 298). If no changes occur by July 23, Yujie will officially join the ranks of major new energy passenger vehicle producers.
In 2016, the Ministry of Industry and Information Technology announced that the State Council approved plans to standardize LSEVs, promoting licenses in cities like Dezhou, Jinan, and Nanning. The cancellation of production licenses for electric vehicles and batteries marked a pivotal moment, signaling a shift toward unified national standards.
These positive policy signals indicate growing acceptance of low-speed electric vehicles at both central and local levels. Through the collaboration between Great Wall and Yujie, it becomes evident that under evolving regulations, the low-speed electric vehicle industry is undergoing necessary upgrades and gaining increasing market recognition.