Chairman of SAIC Motor Claims Tremendous Cost Pressure

“Affected by the epidemic, the safety and stability of the industrial chain and supply chain are facing severe challenges. The current sharp price increase of raw materials of batteries is even more disturbing. In the last year or so, the price of lithium carbonate has exploded tenfold, and automakers are under tremendous cost pressure.” These dire words were from Chen Hong, Chairman of SAIC Motor, as he spoke at the 2022 World New Energy Vehicle Congress on August 27.

Chen Hong also pointed out other challenges facing the industry at present. First, with the development of new energy vehicles in China, it is necessary to have a clear road map to guide the green and low-carbon development of the automobile industry. Second, protection barriers still exist in individual areas, which is not conducive to the formation of a unified national market. Third, some enterprises are blindly pursuing large-scale products and long cruising range, which is only leading to some electric vehicles having a higher energy consumption rate per mile.

“The key to comprehensive electrification lies not only in electric products, but also in higher energy efficiency, lower emissions and optimization of the whole industry chain,” Chen Hong added.

Chen also put forward two suggestions for the green development of the auto field. First, he suggested the launching of a carbon points policy, which would be directly linked to carbon emissions, so as to encourage enterprises to launch products that are both energy-saving and emission-reducing. Second, policy support needs to be expanded from product to R&D, manufacturing and actual use, including encouraging enterprises to increase their R&D investment and build or rebuild green factories.

In the first half of 2022, SAIC achieved revenue of 315.9 billion yuan ($45.7 billion), down 13.68% year-on-year, while the company’s net profit was 9.748 billion yuan, down 48.81% year-on-year.

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In the first half of this year, independent brands, new energy vehicles and overseas operations led the company to achieve some new growth. From January to June, the sales volume of SAIC’s own brands reached 1.139 million units, accounting for more than 50% of the company’s total sales volume. The sales volume of new energy vehicles reached 393,000 units, a year-on-year increase of 32.9%. Overseas sales reached 381,000 vehicles, up 47.7% year-on-year.