Sanitation Industry I: New Energy Sanitation Vehicles Usher in A Good Opportunity for Development

Environmental sanitation is a topic that will never be avoided in the development of human society. The role of the sanitation industry is highlighted in the increasingly serious environmental protection problems. The sanitation industry mainly includes several aspects. One is the overall layout and construction of environmental sanitation and facilities; the other is the sanitation cleaning of the space environment, including the cleaning of streets, roads, public places, and water areas.

The sanitation industry as a whole is divided into two parts, including sanitation equipment and downstream sanitation services. The upstream of sanitation equipment is automobile chassis manufacturing, steel, general equipment, and other manufacturing industries and bulk commodities; the downstream of sanitation services is the environmental treatment projects such as garbage disposal and recycling of renewable resources.

With reference to relevant information, the development stages of the environmental sanitation equipment industry can be divided into the primary stage, where the mechanical rate is about 30%, the basic stage about 60%, and the comprehensive stage with more than 80%.

The number of sanitation vehicles exceeds 450,000, with a compound growth rate of 11% from 2011 to 2018. Thanks to the increase in the marketization rate of sanitation services and the mechanization rate of sanitation equipment, sanitation vehicles have developed rapidly. According to data from the National Bureau of Statistics and the Ministry of Housing and Urban-Rural Development, the total number of sanitation vehicles in cities, counties, and towns in 2018 was 25.2, 6.1, and 142,000. As the stock update of traditional sanitation vehicles accelerates, the promotion of new energy sanitation vehicles will be further facilitated.

New Energy Sanitation Vehicles Perfectly Fit the Environmental Sanitation Requirements of Fixed Lines and Low Noise

The chassis of a pure electric commercial vehicle has the advantages of relatively simple and mature technology, convenient charging, low emission, and low noise. It is suitable for sanitation vehicle operation. At the same time, the sanitation vehicle has the characteristics of high-frequency operation and fixed operation route. It adopts a pure electric sanitation vehicle. It can greatly reduce the content of air pollutants and reduce the problem of nuisance to the people during operation. It has the inherent motivation for promotion. According to the content listed on the official websites of major new energy sanitation vehicle companies, the current new energy sanitation vehicles have basically formed a full range of product coverage.

Policy Assistance, New Energy Sanitation Vehicles Have Grown Substantially

Driven by policies, China's new energy vehicles have ushered in historic development opportunities, and sanitation vehicles have gradually emerged driven by the market. Due to the high cost, sanitation companies have insufficient power to update new energy sanitation vehicles, and the production and sales of new energy sanitation vehicles are greatly affected by the policy. According to statistics, the output of new energy sanitation vehicles in 2015 was 1976. In 2016, the state strengthened subsidy management, resulting in a year-on-year decline of 44%. In 2017, benefited from the increasingly improved subsidy policy and the expansion of pilot cities, the market demand space was further opened up. New energy in 2018 Automobile subsidies were reduced, and the output of new energy sanitation vehicles was only 1,522, a year-on-year decrease of 66%. Since 2018, various provinces and cities have introduced intensive policies for the promotion of new energy vehicles, requiring the purchase of new or updated new energy sanitation vehicles to meet certain requirements, which has greatly accelerated the trend of electrification of sanitation vehicles. In 2019, the output of new energy sanitation vehicles was 4445, a year-on-year increase of 192%.

The Penetration Rate of New Energy Sanitation Vehicles Is Still Low, And There Is Still A Lot of Room for Development

In 2019, the number of new energy buses in China was 410,000, with a penetration rate of 59%; the number of new energy taxis reached 77,000, with a penetration of 5.5%; the number of logistics vehicles was 296,000, with a penetration rate of about 0.99 %. Compared with the penetration rate of new energy vehicles in other public sectors, the development of new energy sanitation vehicles is lagging behind, and the penetration rate ratio is large. Assuming that the cumulative sales of new energy sanitation vehicles since 2010 are in possession, then new energy sanitation vehicles in 2019 The penetration rate of car ownership is only about 3%.

The Current Main Battlefields Are in Beijing And Shenzhen

In 2019, more than 60% of the sales of new energy sanitation vehicles will be concentrated in Shenzhen and Beijing. In 2019, the sales of new energy sanitation vehicles in Shenzhen and Beijing were 1,019 and 806, respectively, accounting for 34% and 27% of the industry's total sales. As early as 2013, Beijing proposed that the proportion of new and updated pure electric sanitation vehicles from 2014 to 2017 reached 30%, 40%, 45%, and 50% respectively. The detailed implementation of promotion policies has greatly supported the growth of local demand for new energy sanitation vehicles. While completing the full electrification of buses, Shenzhen has created a "green sanitation" business card, accelerated the progress of electrification of sanitation vehicles, and made its purchase of new energy sanitation vehicles far ahead.

Statistics show that in 2018, the sales of sanitation vehicles exceeded 96,000. Among them, Chengli, Zoomlion, and Longma ranked in the top three with sales of 1.7, 1.6, and 6,000, respectively, with a market share of about 17.5%, 17%, and 6.4%, respectively. And the CR3 of the sanitation vehicle industry has increased from 37% in 2016 to 40% in 2019, and the concentration of the sanitation vehicle industry has continued to increase.

The market size of new energy sanitation vehicles in 2019 is about 3.3 billion yuan. It is estimated that the penetration rate of new energy sanitation vehicles is expected to reach 29% in 2022, corresponding to the market size of about 30 billion yuan; the penetration rate is expected to reach 65% in 2025, and the market size is expected to reach 760 100 million yuan, with a CAGR of 68% in 2020 to 2025.