[SMM Analysis] Three Departments Hold Video Conference on Strengthening Safety Management of NEVs

On June 19, the Equipment Industry Department I of the Ministry of Industry and Information Technology, the Quality Development Bureau of the State Administration for Market Regulation, and the Fire Supervision Department of the National Fire and Rescue Administration (hereinafter collectively referred to as the "three departments") jointly held a video conference on strengthening the safety management of new energy vehicles (NEVs) to study and deploy the safety management work for NEVs this year.

 

The conference pointed out that China's NEV industry has achieved remarkable results, which have not come easily and need to be cherished. All relevant parties should thoroughly study and implement the important speeches and instructions of General Secretary Xi Jinping, adhere to the principle of balancing development and safety, maintain a clear mind, spare no effort to prevent and resolve safety risks in NEVs, enhance safety levels, and continue to consolidate the favorable situation of industrial development.

 

The conference required that vehicle producers and power battery enterprises should consciously assume the main responsibility for product quality and safety, do a good job in risk prevention in areas such as product design verification, manufacturing, and after-sales service, strictly fulfill their obligation to inform, guide consumers to use vehicles correctly, refrain from exaggerated and false advertising, and resolutely uphold the safety bottom line. They should adhere to long-termism, avoid "cut-throat competition," and must not cut corners or use inferior materials to achieve short-term "cost reduction and efficiency enhancement" at the expense of product performance and quality.

 

Next, the three departments will further strengthen work coordination, promote information sharing, organize safety hazard investigations and defect investigations, increase the intensity of production conformity supervision and inspection, urge enterprises to enhance the effectiveness of safety monitoring platforms, seriously investigate and handle enterprise violations, resolutely maintain a favorable order for industrial development, and promote the high-quality development of China's intelligent connected NEV industry.

 

Representatives from local industrial and information technology, market supervision, and fire and rescue departments, the Equipment Industry Development Center of the Ministry of Industry and Information Technology, the Technical Center for Defective Product Recall of the State Administration for Market Regulation, relevant NEV producers, power battery enterprises, as well as industry organizations and inspection and testing institutions attended the conference.
 

SMM Analysis:

The video conference on NEV safety management jointly held by the three departments on June 19 clarified the key regulatory directions for the next stage: strengthening the safety bottom line, consolidating corporate responsibilities, and curbing irrational behaviors of low-price competition in the industry.

This policy trend will have a practical impact on both power battery enterprises and original equipment manufacturers (OEMs).

Firstly, for power battery enterprises, this means that quality control and safety capabilities will become core competitiveness. Regulation will no longer just stay at the vehicle level but will explicitly propose that battery enterprises should be responsible for product design, production conformity, and after-sales service, with a particular emphasis on not "reducing costs" at the expense of performance. Against the backdrop of ongoing price wars in the current industry, this directly negates the approach of some companies that cut costs by reducing configurations and lowering the safety margins of thermal management. In terms of actual impact, battery enterprises with strong technical and quality capabilities will be more favoured by OEMs, while small and medium-sized enterprises lacking product verification systems and process control capabilities will find it even harder to secure opportunities in the designation of new car models in the future.

Meanwhile, measures such as information sharing and defect investigation mentioned in the meeting may also prompt battery enterprises to accelerate the establishment of safety monitoring platforms and enhance their data collection and early warning capabilities. This also places higher demands on hardware and software development, as well as BMS system integration capabilities.

Secondly, the impact on new energy vehicle OEMs, although not explicitly named in the meeting, is actually very critical. On the one hand, OEMs will shoulder more responsibilities for safety management, such as strengthening collaboration with the supply chain and controlling the quality of risk-prone components. On the other hand, how to balance energy efficiency and safety during the vehicle development process will also become an important topic. Some car models that push battery pack design to the limit in pursuit of high driving range may need to adjust their design strategies after stricter regulations are implemented.

In addition, the meeting's proposal to "oppose cut-throat competition" serves as a warning to the pricing logic of the entire industry. Currently, the market strategy of "volume discount" may drive short-term growth in installations, but if it leads to frequent safety incidents, it will not only affect brand reputation but may also trigger stricter industry rectifications. From this perspective, the meeting is essentially a rebalancing of the quality of industry growth. Overall, stricter regulations will prompt the industry to return to rationality, driving battery enterprises to shift from "competing on scale" to "competing on quality and capabilities," and placing higher demands on medium and long-term technological investment, product verification system construction, and intelligent platform capabilities. The industry landscape is expected to further concentrate towards the top players as a result. For investors and practitioners, safety capabilities are becoming a new watershed in the new energy vehicle industry chain.