Guotou Securities: The new national standard for electric bicycles is released. The industry concentration is expected to increase.

Guotou Securities released a research report stating that under the policy orientation of promoting the implementation of new policies, the subsidy effect for replacing old electric bicycles with new ones is expected to strengthen by 2025, and industry demand is expected to increase. There have been 11 changes made in the 3C certification switch and the new national standard for electric bicycles, which has improved the safety of electric bicycles. By adding Beidou positioning, communication, and dynamic safety monitoring functions, consumers can have real-time access to key safety information of electric bicycles (such as theft, abnormal battery temperature, or high voltage), which is conducive to accelerating the enhancement of industry concentration. Event: On January 13, 2025, the mandatory national standard revision for electric bicycles was officially released. The "Electric Bicycle Safety Technical Specification" (GB17761-2024) was released on December 31, 2024, and will be officially implemented on September 1, 2025, replacing the old standard (GB17761-2018). Main points of Guotou Securities: The new standard has made 11 changes compared to the old standard. According to information from the Ministry of Industry and Information Technology's official WeChat account, the new standard compared to the old standard: 1) Strengthened the requirements for non-metal materials to be fire retardant; 2) Clearly stated that the total mass of plastic used in electric bicycles should not exceed 5.5% of the total vehicle mass; 3) Added requirements for the low-speed operation torque, no-load back EMF, and inductance coefficient difference of the electric motor; 4) Improved the anti-tampering requirements for the battery pack, controller, and speed limiter; 5) Increased the requirements for braking performance and reduced the maximum braking distance of the vehicle; 6) Raised the upper limit of the total vehicle mass for electric bicycles using lead-acid batteries from 55kg to 63kg; 7) Added requirements for enterprise quality assurance capabilities and product consistency, specifying that production enterprises should have production capacity, testing capabilities, and quality control capabilities matching the production of major components such as the whole vehicle and frame of electric bicycles; 8) Required electric bicycles to have Beidou positioning, communication, and dynamic safety monitoring functions (consumers can choose whether to retain the Beidou positioning module when the ToC product is sold); 9) No longer mandatory for all models to be equipped with pedals; 10) Clearly encouraged the installation of rearview mirrors on electric bicycles; 11) Required production enterprises to specify the recommended service life of electric bicycles and mark it on the nameplate and product qualification certificate. The new standard is beneficial for improving the safety of electric bicycles. 1) The new standard strengthens the fire retardant performance requirements of non-metal materials, limits the use of plastic, and adds permanent high-temperature resistance markings, which can help reduce the hidden dangers and hazards of fire accidents; 2) Reduced space for illegal modifications. The new standard adds requirements for the no-load back EMF and inductance coefficient of the electric motor, ensuring that the vehicle speed cannot exceed 25km/h even when the input voltage is at its maximum; the new standard significantly increases the threshold for illegal modifications through improving anti-tampering technical indicators and testing methods, adding mutual recognition and coordination functions, and implementing "one vehicle, one pool, one charge, one code" technically. The new standard relaxes the weight limit for lead-acid battery models to 63kg, which is beneficial for reducing the demand for modifications due to insufficient battery life. 3) Vehicle performance improvement. The new standard enables consumers to have real-time access to key safety information of electric bicycles (such as theft, abnormal battery temperature, or high voltage) by adding Beidou positioning, communication, and dynamic safety monitoring functions. The new standard sets an 8-month production transition period and a 3-month sales transition period: According to information released by the Ministry of Industry and Information Technology, until August 31, 2025, companies can produce electric bicycles according to either the old or the new standard; after September 1, 2025, all newly produced electric bicycles must meet the requirements of the new standard. The new standard gives an additional 3-month sales transition period to vehicles produced according to the old standard until August 31, 2025, allowing sales until November 30, 2025; after December 1, 2025, all sold electric bicycle products must comply with the new standard. The new standard is expected to accelerate the enhancement of industry concentration. 1) The new standard includes clauses on enterprise quality assurance capabilities and product consistency, explicitly requiring production enterprises to have production capacity, testing capabilities, and quality control capabilities matching the production of whole vehicles and frames of electric bicycles. We estimate that small businesses with low annual sales may face clearance pressure due to the high cost of investing in independent production capacity. 2) With restrictions on vehicle weight, control of illegal modifications, and limits on the use of plastic, leading companies can enhance their product competitive advantages and expand market share by highlighting the development of new batteries and materials. Investment recommendations: We are optimistic about the leading electric bicycle companies YADEA (01585), Aima Technology Group (603529.SH), and Ninebot Limited (689009.SH), which have a high degree of intelligence in their products and maintain high growth under the drive of diversified businesses. Risk warning: Subsidy for old-for-new replacement is less than expected, and industry competition intensifies.