Without subsidies, what new tricks can the new energy sector come up with?

On November 21st, the Guangzhou Auto Show is about to kick off.

In 2024, as the theme of "Auto Commune" for the Guangzhou Auto Show, "Gasoline cars will never die" has come true this year. Although the penetration rate of new energy passenger vehicles has exceeded the 50% mark since last year, the growth rate is slowing down.

Data from the Passenger Car Association shows that the retail penetration rate of new energy vehicles in October was 57.2%, a slight month-on-month decline of 0.7% compared to September.

Different from last year's discussion about whether gasoline cars still have a future, this year, gasoline cars are making a strong comeback. From June to September, the sales volume of traditional gasoline cars in China increased year-on-year for four consecutive months. Although the retail sales of gasoline cars fell below 1 million again in October, the "equal rights for gasoline and electric vehicles" strongly advocated by joint-venture brands is about to take a big step forward.

"The real battle will only start after equal rights for gasoline and electric vehicles. The current prosperity of electric vehicles is actually built on the basis of national policy inclination, substantial subsidies, and support."

Facing the rise of new energy vehicles and the continuous decline of the market share of gasoline cars, some people believe that it is the visible hand that has lifted the new energy industry. Once the subsidies decline, and gasoline and electric vehicles return to the starting line of equal rights, gasoline cars are expected to stir up the market again.

"Practice is the sole criterion for testing truth." While the debate between gasoline and electric vehicles is still ongoing, two key changes are reshaping the competitive landscape.

On the one hand, on October 9th, multiple departments jointly issued an announcement that starting from 2026, the purchase tax for new energy vehicles will be halved again, and the maximum tax reduction per vehicle will be reduced to 15,000 yuan. On the other hand, gasoline cars are catching up rapidly in the field of intelligence, and traditional weaknesses such as assisted driving and intelligent cockpits are being quickly made up for.

Under the dual effects of policy decline and technological catch-up, the test of "swimming naked" for new energy vehicles has already arrived.

01

Saying Goodbye to the Subsidy Comfort Zone

Until the official announcement on October 9th, the market still had the last hope for the exemption of the purchase tax for new energy vehicles in 2026.

Since September 2014, this policy has been extended four times. Just as some gasoline car users firmly believe that the rise of new energy vehicles is entirely due to policy support, the tax exemption for electric vehicles is also a deeply ingrained stereotype.

The latter enjoys the dividends, while the former is dissatisfied.

In addition to the purchase tax exemption, new energy vehicles also enjoy obvious benefits such as exemption from fuel surcharges, green license plates in big cities, and no traffic restrictions. For car companies, real-money subsidies have injected key impetus into the new energy industry, which was initially weak in technology and high in cost.

The policy inclination has promoted the leapfrog development of the industry. In 11 years, the market penetration rate of new energy vehicles in the country has soared from the initial 0.3% to the current 57.8%, achieving a beautiful overtaking on a curve. However, while the policy support has promoted the development of the industry, it has also inevitably obscured the efforts of excellent enterprises and caused complaints from gasoline car owners who feel the gap.

Now, the tide is receding. With the tightening of purchase tax subsidies and the weakening of replacement subsidies, the policy dividends that have lasted for many years are coming to an end. The answer to whether new energy vehicles are "swimming naked" will soon be revealed in market competition.

Some clues can already be seen from the current market reaction.

After the purchase tax policy was finalized, more than a dozen car companies under sales pressure successively launched "guarantee" plans, promising to bear the purchase tax costs for users. Behind this, in addition to corporate responsibility, there is more of the real pressure faced by the industry.

"It's extremely difficult to sell cars." Xiao Meng, a salesperson of Xiaomi cars in Shanghai, said that on average, each salesperson in his store could only sell one car in October. Among them, the purchase tax has become a major obstacle.

"The impact of the purchase tax is extremely significant." Another salesperson, Xiao Li, from the same store said in an interview in October, "Many people gave up halfway after hearing that they had to wait for a year for this car (Xiaomi YU7), and then after hearing about the more than 10,000 yuan purchase tax (next year), 90% of them gave up."

Although the guarantee policies of car companies have attracted some hesitant customers, they still cannot fundamentally relieve the sales dilemma.

Xiao Meng said that a user who missed the chance to get a zero-gravity seat as a gift during the new car's launch placed an order under the stimulus of the purchase tax policy. "In his own words, if it weren't for the guarantee policy for the purchase tax, he might still not be able to get over the hurdle of the zero-gravity seat." However, such cases are still in the minority.

Facing the fickle market, consumers who are afraid of being "stabbed in the back" and dislike being pressured into buying are no longer willing to be influenced by policies.

It has almost become a consensus that product prices will drop after the subsidy decline. Take the author's own experience as an example. A few months ago, the author enjoyed a 20% national subsidy and bought an IKEA lamp and bulb for 119 yuan. Recently, a friend bought the same product without a subsidy for only 114 yuan, which is even cheaper than the subsidized price.

Moreover, the price fluctuations in the automotive industry have been quite unstable recently. With many uncertainties, more consumers would rather become "wait-and-see parties."

A consumer shared his experience, saying that he had his eyes on the Yipai 007. After learning that the provincial subsidy in Sichuan was about to be cancelled, he rushed to pick up a car. However, since there was no top - of - the - line model of the 007 in stock, he picked up a car from another brand instead. As a result, less than a month later, Yipai launched the 007+ model, which not only added configurations such as lidar, high - computing - power chips, and active suspension but also kept the price the same. For this reason, he regretted very much and said, "I should have paid the purchase tax. I don't care about the provincial subsidy. I've lost a lot."

For car companies in the elimination stage, bearing the purchase tax is almost an inevitable choice. Looking back, we will find that the tracks of history are always similar. In the second half of 2022, gasoline cars enjoyed a short - term policy of halving the purchase tax. At the beginning of 2023, the subsidy policy was cancelled. Coupled with the rise of new energy vehicles and the pressure on sales at the beginning of the year, a price war started in March and has continued until now.

What's more serious is that even if a guarantee policy is introduced, it may be affected by its side effects. A salesperson from Hongmeng Zhixing revealed that some customers chose to give up after learning about the policy: "This clearly means that they can't pick up the car this year."

02

Returning to the Same Starting Line

Just as the visible hand is slowly withdrawing, the invisible hand of the market is recalibrating the balance of competition.

The charging cost and intelligent experience used to be the two most criticized weaknesses of gasoline cars. Now, with the rapid iteration of technology, the latter is being quickly made up for, becoming an important driving force for the recovery of the gasoline car market.

In the field of assisted driving, take the newly launched new - generation Sagitar L as an example. As a gasoline car in the 100,000 - 150,000 - yuan range, in terms of hardware, the new car is equipped with 7 cameras, 5 millimeter - wave radars, and 12 ultrasonic radars. Inside the car, there is a 15 - inch 2K floating central control screen, a 10.25 - inch full - liquid - crystal instrument, and a W - HUD head - up display system. In terms of software, the new car is equipped with the IQ.Pilot enhanced driving assistance system, which covers 95% of urban road conditions and 100% of highway scenarios, and can realize functions such as high - speed navigation assistance, precise on - and off - ramps, smooth avoidance, and start - stop at traffic lights.

In the field of intelligent cockpits, Dongfeng Nissan has taken a crucial step. By cooperating with Huawei, the Teana·Hongmeng cockpit has demonstrated an interactive experience comparable to that of new energy models, setting a new benchmark for the intelligent upgrade of traditional gasoline cars.

The improvement of the intelligent weakness has directly driven the recovery of the gasoline car market. Data shows that the sales volume of traditional gasoline cars in China reached 1 million in September, a year - on - year increase of 6.4% and a month - on - month increase of 10.9%, and it has achieved year - on - year positive growth for four consecutive months.

With the decline of the new energy purchase tax in 2026, gasoline cars will enter the market with more balanced product strength. The competition between gasoline and electric vehicles will shift from a misaligned competition under policy inclination to a full - dimensional head - on confrontation of hard power.

Good fortune lies within bad, and bad fortune lurks within good. The decline of subsidies is the end and also the starting point for the maturity of the industry.

In essence, subsidies are short - term regulatory measures during periods of market instability or weak economy. The original intention of the purchase subsidy for new energy vehicles was to bridge the price gap with gasoline cars and cultivate emerging industries. However, subsidies can only solve short - term problems and cannot eliminate the long - term uncertainties in the industry's development.

Will new cars be discounted, upgraded, or have additional configurations? Will the residual value of used cars be stable? In an environment of highly asymmetric information, consumers cannot make rational judgments about the long - term situation. They can only wait and see with the mentality of not wanting to suffer losses and hope to transfer the cost pressure to car companies in the end.

When the subsidy cushion is gradually withdrawn, the competition logic of the industry will inevitably shift from being driven by policy dividends to being driven by product value. New energy car companies need to get rid of their path dependence on subsidies and show real skills in cost control, technological innovation, and user experience. Gasoline cars, on the other hand, have regained the confidence to compete with new energy vehicles on the same stage by making up for their intelligent weaknesses and leveraging their advantages in the mature industrial chain.

This industrial transformation that started with policy support has now returned to the essence of market - led development, and the real battle between gasoline and electric vehicles is just beginning at this moment.

This article is from the WeChat official account "Auto Commune" (ID: iAUTO2010), written by Sai Jiatong and edited by He Zengrong. It is published by 36Kr with authorization.