At the "two sessions" this year, the most-talked topics for China’s auto industry include automotive chip, intelligent vehicle, new energy vehicle and carbon neutrality.

Automotive chip

Chips have become more and more widely used in vehicles with the improvement in vehicles’ intelligence and electrification. But demand is outpacing production which has been disrupted by such uncertainties as sporadic COVID-19 and natural disasters.

To alleviate the supply crunch of automotive chips, especially to enhance local suppliers’ control in the segment, many executives from the local auto industry offered relevant proposals during the meetings. In general, many delegates think that the monitoring, improvement in supply chain, talent pooling and industrial synergy will be key to the long-term development of China’s auto chip supply chain.  

Wang Fengying, president of Great Wall Motor, said that to solve the problem of automotive chip supply shortage, relevant regulators should take appropriate measures in the short term to restore order. For those suppliers which aim to expand the production of chips, there should be a green channel for regulatory review and approval to facilitate more rapid production.  

For the intermediate and long term, the country should build its own and controllable chip supply chain and establish a long-term system for attracting and cultivating talents. That is essential to the high-quality development of China’s auto industry.

For specific measures, the president suggested that a five-to-ten-year industrial development planning should be stipulated and the government should guide local players to keep up with the most advanced technology trends around the world. And relevant incentive policies should be formulated for the application of locally-made auto chips.

Chen Hong, secretary of the party committee and chairman of SAIC Motor, also said policy instruction and industrial synergy should be employed to set up standard technical specifications and regulations. Besides, a special fund should be founded with the government playing a leading role. Chip suppliers and automobile firms should be encouraged to participate in the fund.

Zeng Qinghong, chairman of GAC Group, and Zhang Xinghai, founder of Sokon Group, proposed to attract investment from foreign automotive chip companies with a purpose to strengthen the production and supply in the domestic market.

Intelligent vehicle

China has been at the forefront of intelligent vehicle technologies and is expected to remain a global leader in the future. But the country is still confronted with some challenges that will impede the development of intelligent vehicle segments, such as the relative immaturity of core technologies, the imperfection of testing systems and the lack of technical standards and regulations.

Zhu Huarong, chairman of Changan Auto, suggested to better the laws and regulations system for intelligent and connected vehicles and break data barriers through cooperation. Meanwhile, requirements should be made to protect automotive data and privacy and reliable data channel should be built for the sound development of intelligent and connected vehicle segment.

Chen Hong, chairman of SAIC Motor, also said it is necessary to revise supporting policies. For example, the legal status of autonomous driving should be clarified in China’s Road Traffic Safety Law and the standard and mechanism to divide the responsibility between human drivers and autonomous systems should be formulated. It was also proposed to establish an evaluation certification system and entry mechanism for autonomous driving levels. 

The chairman of the Shanghai-based automaker also suggested to enhance the support for developing core technologies. By means of exclusive funds, companies should be encouraged to be capable of developing core software and hardware, such as operating system and drive-by-wire chassis. Technology scale synergy should be achieved as soon as possible.

Robin Li Yanhong, Baidu CEO, also advised about the innovation in autonomous driving related policies to support the worldwide leading position. Local governments should offer great support to the application of autonomous vehicles without safety drivers and create operation policy pilot zone. The head of the searching engine giant also said that intelligent transportation infrastructure networks should be built in an appropriate and advanced way to improve transportation’s efficiency and safety by virtue of 5G and vehicle-to-road technologies.

New energy vehicle

China’s new energy vehicle market has entered rapid development phase, but challenges are emerging throughout the whole chain, such as rising price of battery material, disruptions in battery supply and difficulty in vehicle charging.

About the above said problems, delegates from automakers and battery suppliers offered various proposals. Yin Tongyue, chairman of Chery Auto, said policies should be updated to include power battery materials into national strategic reserved resources. Dedicated funds should be established to encourage and support local companies’ acquisition of material resources in foreign countries to guarantee the safety of new energy vehicle supply chain.

Zeng Yuqun, chairman of CATL, suggested that the country should speed up the exploration and development of lithium resources while local companies should enhance their innovation capability and make technology breakthroughs to increase the efficiency of resource recycling.

Because of disruptions in the supply chain and the phasing out of new energy vehicle subsidies, many local automakers have raised the price of new energy vehicles. For this situation, Zeng Qinghong, chairman of GAC Group, put forward the proposal that the subsidy scheme should be extended by one year or two years. For the new phase, the government should make strategic adjustment in the subsidy schemes to spur the application and encourage the building of supporting facilities.

Lei Jun, chairman of Xiaomi, suggested that the government should strengthen the policy guidance to promote the coordinated deployment of high-power fast charging network. A national-level innovation cooperation platform should be built to step up the efforts to make breakthroughs in key technologies. Besides, he also advocated improving the service guarantee to popularize high-power charging infrastructure.

Li Shufu, chairman of Zhejiang Geely Holding Group, offered proposals about battery swapping efforts. The chairman proposed to define clarified provisions about the construction of battery swap stations and the approval for granting lands. The government should optimize relevant catalogues, laws and regulations, and develop a certification system that allows the certification of vehicles and batteries to be made separately. He said the government should move faster on standardizing the hardware and software protocols of battery swapping interfaces.

Carbon neutrality

Delegates also discussed carbon neutrality. New energy vehicles have been labeled as low carbon emission and environment-friendly, but the vehicles will generate carbon footprint across their whole life cycle, including energy generation, raw material, parts manufacturing, driving on the road, and disposal and recycling.

Yin Tongyue, chairman of Chery, suggested that carbon trade which is unavailable in the auto industry for the time being, can be used to encourage producing new energy vehicles given that those vehicles are effective in reducing emissions. Carbon trade should be applied in the auto industry and automakers should be allowed into the market.

Zeng Yuquan, chairman of CATL, suggested that the country should speed up the study on batteries’ carbon footprint, calculate the footprint in a reasonable way and build the management system. Besides, China should participate in the stipulation of global carbon neutrality rules and promote the establishment of a joint mechanism for battery carbon footprint management with the European Union, which are of vital importance to maintain China’s competitiveness around the world.

Lei Jun said that a complete, clear and accurate carbon footprint accounting system can serve as the premise and foundation for the low-carbon development of new energy vehicle industry. Thus, it is urgent to build a system for supporting the management, calculation, verification, and checking of carbon footprints.