CITIC Securities: New national standards for electric bicycles implemented, industry competition optimization may highlight the advantages of leading enterprises

According to the Zhitong Finance APP, CITIC Securities has released a research report stating that the final draft of the "Safety Technical Specifications for Electric Bicycles," referred to as the "New National Standard," has been published. This revision of the new national standard will further enhance consumer confidence in two-wheeled vehicle products. Coupled with the old-for-new subsidy, the industry is expected to see both volume and price increase. The formal issuance of the new national standard will raise industry entry barriers, benefiting leading enterprises. These leading companies are expected to further expand their market share after the official implementation of the new national standard, leveraging their advantages in policy responsiveness and product iteration capabilities.

The main points of CITIC Securities are as follows:

The implementation of the new national standard marks a new phase in industry competition regulation.

According to information from the Ministry of Industry and Information Technology, the final draft of the "Safety Technical Specifications for Electric Bicycles" (GB 17761—2024), commonly referred to as the "New National Standard," will be published on January 13, 2025. The national standard for two-wheeled vehicles was first issued in 1999 (the old standard), followed by its first revision in 2018, which promoted the standardization of the two-wheeled vehicle industry and expanded demand. This is the second revision. The firm believes that this revision will further strengthen industry regulation based on the previous revision, guiding enterprises towards healthy competition and increasing consumer trust and acceptance of two-wheeled vehicles.

The policy direction and details are generally consistent with the draft for public consultation, with slight optimizations.

In terms of direction, according to the document released by the Ministry of Industry and Information Technology, the main focus of the "New National Standard" remains on ensuring riding safety and enhancing product practicality. Several major changes have been made compared to the 2018 version: electric bicycles are required to have BeiDou positioning, communication, and dynamic safety monitoring functions; to ensure riding safety, the testing methods for motor rated power and maximum speed have been optimized, with the maximum design speed not exceeding 25 km/h. Additionally, regarding weight, the new national standard has relaxed the requirement to 63 kilograms compared to the draft for public consultation, no longer mandating all models to be equipped with pedals, but encouraging the installation of rearview mirrors, which better aligns with consumer needs and protects product practicality. In terms of timing, the document specifies that production of old version two-wheeled vehicles will cease on September 1, 2025, and sales of old version two-wheeled vehicles will stop after December 1, 2025, fully transitioning to the new national standard era.

Impact on the industry: Enhanced product practicality, standardization of intelligent configurations leading to simultaneous volume and price increases. Further increase in production thresholds leading to improved industry structure.

The new national standard has fully considered consumers' actual usage needs based on multiple previous surveys, adjusting aspects such as removing pedals, further increasing the weight of lead-acid vehicles, and optimizing speed measurement methods, respecting consumer demands and enhancing product strength. The firm believes that the improvement in two-wheeled vehicle safety will lead to an overall expansion of demand in the two-wheeled vehicle product industry. Additionally, the document emphasizes requirements such as vehicle intelligence and the proportion of plastic parts to total vehicle weight being less than 5.5%, which will increase product costs and is expected to lead to an increase in industry ASP (Average Selling Price). The firm believes that after the national standard is implemented, the "old-for-new" subsidy policy will continue to be promoted more vigorously, stimulating demand for two-wheeled vehicles and driving the replacement of existing two-wheeled vehicles. On the production side, according to this document, manufacturing enterprises must possess upstream capabilities such as cutting, bending, and welding, which are directly written into the national standard, making the selection of manufacturers' production capabilities more stringent, potentially leading to the elimination of OEM factories and improving the industry structure The bank believes that the industry will enter a new stage of high-quality competition, moving towards an optimized structure, and the leading companies will benefit.

Risk Factors:

Overall consumer spending ability is lower than expected; the enforcement strength after the official release of the new national standard draft is lower than expected; consumer acceptance of products that meet the new national standard is lower than expected; the clearance speed of tail-end brands is lower than expected