According to the latest data from the Ministry of Public Security, by the end of June 2024, China's new energy vehicle population has reached 24.72 million, accounting for 7.18% of the total vehicle population, of which pure electric vehicles account for 73.35%, reaching 18.134 million. In July this year, monthly sales of new energy vehicles surpassed those of fuel vehicles for the first time, indicating strong market demand for new energy vehicles.

To enhance safety supervision of new energy vehicles, the Ministry of Public Security, in collaboration with multiple agencies, promulgated the "Inspection Regulations for Operational Safety Performance of New Energy Vehicles" on August 25. These new regulations will take effect on March 1, 2025. These regulations constitute China's first safety inspection standard specifically formulated for new energy vehicles, with a particular focus on traction battery safety as a mandatory inspection item. Additionally, they cover inspections and adjustments of key characteristics such as drive motors, electronic control systems, and electrical safety. The implementation of these standards aims to ensure the safety performance of new energy vehicles, providing consumers with more reliable transportation options, and marks the increasing maturity and standardization of China's new energy vehicle industry.

Goodbye to the era of mixed inspections for fuel and electric vehicles

In fact, for a long time in the past, new energy vehicles did not have their own set of inspection norms and standards. They have been subject to the same inspection process and norms as fuel vehicles. However, since the primary energy source of new energy vehicles is electricity rather than fuel, many inspection processes have been mere formalities without achieving any inspection effects. Therefore, the annual inspection of new energy vehicles has been controversial, and it has been criticized within the industry as an inspection process that exists merely for the sake of following procedures.

However, with the promulgation of the "Inspection Regulations for Operational Safety Performance of New Energy Vehicles," new energy vehicles now have their own dedicated inspection regulations. Compared to traditional fuel vehicle inspections, new energy vehicle inspections now include comprehensive inspections of core components such as traction batteries, motors, and electronic control systems. This change aims to ensure vehicle safety and performance. The new regulations place particular emphasis on safe charging inspections and electrical safety inspections of traction batteries, designating them as mandatory inspection items, thereby significantly raising the safety standards for new energy vehicles.

For operating new energy vehicles, the new regulations impose stricter inspection requirements, including detailed monitoring of the temperature and voltage of traction batteries during charging and discharging. These requirements are based on an in-depth analysis of the causes of new energy vehicle accidents, where "thermal runaway" is often identified as the primary cause of spontaneous combustion, especially during charging when inaccuracies in the Battery Management System (BMS) can lead to "overcharging," easily triggering battery thermal runaway.

The new regulations set clear upper limits for the charging temperatures of lithium iron phosphate batteries and ternary lithium batteries, at 65°C and 60°C respectively. These temperature ranges are both scientific and safe, well below the critical point for thermal runaway in battery systems. Additionally, the regulations include the temperatures of drive motors, motor controllers, and DC/DC converters as optional inspection items. This not only helps vehicle owners better understand their vehicle's condition but also provides new inspection directions for inspection enterprises, prompting them to stock relevant inspection equipment to further reduce the risk of spontaneous combustion.

In summary, the new regulations significantly enhance vehicle safety standards by strengthening inspections of core components in new energy vehicles, particularly those related to battery system safety. They provide robust safeguards for the healthy development of new energy vehicles. Regarding inspection timelines, the new regulations have not yet provided clear information, but it is highly likely that they will follow similar guidelines to previous inspection regulations, requiring non-operating passenger vehicles to undergo on-site inspections at the inspection agency in the sixth and tenth years of operation, with inspection marks to be applied for every two years during this period. For vehicles over ten years old, on-site inspections will be required annually.

The 'new' inspection may boost used car valuations

Industry experts claim that the promulgation of the new regulations has had a profound impact on new energy vehicle insurance and used car valuations. For new energy vehicle insurance, the implementation of the new regulations implies more comprehensive and detailed inspections of the vehicle's "three-electric systems" (traction batteries, motors, and electronic control systems). This change will help insurance companies more accurately assess the risks associated with new energy vehicles, thereby optimizing the design and pricing strategies of insurance products. Fault data collected through regular annual inspections will become an essential component of insurance companies' pricing models, making vehicle insurance premiums for specific models and usage scenarios more reasonable. This is expected to not only reduce insurance premiums for new energy vehicles but also generate more stable and reliable revenue streams for insurance companies, alleviating the severe losses in the new energy vehicle insurance business.

In terms of used car valuations, the introduction of the new regulations is equally positive. In the past, accurately assessing the wear and tear of components in used new energy vehicles was challenging, leading to issues such as low residual values and difficulties in detecting vehicle conditions. However, the implementation of the regulations will facilitate the quantitative assessment of the residual value of new energy vehicles. Regular annual inspections can promptly identify and eliminate potential safety hazards, ensuring that vehicle performance remains at normal levels and enhancing used car valuations. This will promote the standardized development of the used new energy vehicle market, providing consumers with more reliable purchase options.

In fact, the introduction of the new regulations not only affects used car valuations but also has a profound impact on new car warranties. In the past, some vehicles that exhibited issues during after-sales inspections were often deemed normal wear and tear, with owners encouraged to continue driving them under the pretext that they did not affect normal driving. However, with the implementation of the new regulations, if these vehicles fail the annual inspection, the determination of whether these attenuations or abnormalities constitute faults cannot solely rely on the manufacturer's word, as the inspection standards are national standards. Therefore, if a new energy vehicle fails the annual inspection due to certain faults, the manufacturer should provide corresponding repairs or replace assemblies and components within the warranty scope. It is believed that the introduction of the new regulations can also urge automakers to proactively improve and upgrade their vehicle warranty programs, further enhancing the driving experience for consumers.