Western Securities: Clear technical routes, reshaping the competitive landscape of hybrid vehicles

The Zhitong Finance App learned that Western Securities released a research report saying that the key driving factor for the increase in the penetration rate of plug-in hybrid models has moved from the previous policy and regulation side to the product and demand side. Traditional OEMs and new car builders are simultaneously promoting new hybrid models, which will further increase the penetration rate of hybrid models. As competitive PHEV and REEV models continue to be launched, and potential players continue to enter, hybrid models will continue to replace traditional fuel vehicles and complement pure electric vehicles, thereby driving a continuous increase in penetration rates.

The main views of Western Securities are as follows:

The development status of hybrid power

Since 2021, the penetration rate of domestic ordinary hybrid models has changed relatively little, and the penetration rate of plug-in hybrid models has continued to increase steadily. Although the influence of dual credits is weakening year by year, and the amount of national subsidies continues to decline, the penetration rate of plug-in hybrid models has maintained an overall growth trend, and many popular models such as the BYD DM-i series, Ideal, and the Incurable Range Edition have emerged. It can be seen that the key driving factor for the increase in the penetration rate of plug-in hybrid models has moved from the previous policy and regulation side to the product and demand side.

On the supply side, due to the increasingly stringent restrictions on fuel vehicle emissions and energy consumption, domestic OEMs continue to shift to new energy sources on the model development side; on the demand side, due to the long cycle of fully achieving pure electrification, it is expected that hybrid models represented by PHEVs and REEVs will continue to be the main force in the passenger car market for a certain period of time.

The principle and configuration of hybrid power

The principle of hybrid technology is to adjust the working range of the engine to the most efficient part by controlling the output of the motor, thereby improving thermal efficiency and reducing fuel consumption. Since there are two power sources, the engine and the motor, the hybrid system has different operating modes due to the different energy flow during operation. Different motor numbers, motor positions, and power couplings form different hybrid configurations. Different hybrid configurations have different performance. Judging from popular models, solutions based on dual motors are currently the mainstream trend, including range extension solutions with ideals and interrogation as typical, and double motor series parallel solutions typical of BYD DM-i.

Technical solutions for hybrid power

Japanese manufacturers were the first to explore, research, and apply hybrid technology. Toyota's THS hybrid system and Honda's i-MMD are representative of these. Domestic OEMs such as BYD, Great Wall, Geely, Changan, and Guangzhou Automobile have also launched competitive hybrid technology solutions.

Hybrid power trend analysis

Western Securities believes that the participants in the PHEV circuit are mainly traditional OEMs. The dual-motor series and parallel configuration has become the mainstream technical route for PHEVs. The technical route of the PHEV configuration is no longer a core element of competition, and product positioning will become the key to competition.

The participants in the REEV circuit are mainly new car builders or new energy brands from traditional OEMs. The REEV track may welcome more participants. Previously, the new car builder positioned pure electric car builders, or is expected to seek the market by developing extended-range models to expand the product line. Traditional OEMs and new car builders are simultaneously promoting new hybrid models, which will further increase the penetration rate of hybrid models. Furthermore, policy-side European and American energy consumption and emission regulations continue to be tightened, and supply-side overseas OEMs have begun to deploy PHEV products. However, after entering the Brazilian market, the BYD Song Plus DM-i received popular sales, which led to an increase in the penetration rate of PHEVs in the Brazilian market.

Target aspects: Recommended automakers BYD (01211) and Great Wall Motor (601633.SH), which have an in-depth layout and product competitive advantage in the hybrid field; recommend focusing on Geely (00175), Changan Automobile (000625.SZ), GAC Group (601238.SH), and SAIC Motor Group (600104.SH); recommend automakers with extended range hybrid layouts and launch competitive products, Ideal Automobile-W (02015), Zero Sports (09863), recommended Follow Cyrus (601127.SH).

Risk warning: Risk of rising costs, risk of worsening competitive landscape, progress in pure electric technology exceeding expectations, and hybrid power-related policies falling short of expectations.