Core Insights - The report highlights the significant contribution of vehicle emissions to air pollution, with motor vehicle NOx emissions accounting for over 34% of the national total, and heavy-duty trucks responsible for 80% of motor vehicle NOx emissions [1][2] - Major cities like Beijing, Shenzhen, and Chengdu see motor vehicle emissions contributing over 40% to PM2.5 pollution, indicating a severe situation for vehicle exhaust management [1][2] Emission Standards and Regulations - The European Commission proposed the Euro 7 emission standards in November 2022, set to replace Euro 6, with implementation timelines for light and heavy vehicles outlined [3] - The transition from Euro 6 to Euro 7 provides a forward-looking guide for the development of China's National 7 (国七) standards, with stricter limits on heavy vehicle emissions and new requirements for non-exhaust pollutants [3] Market Opportunities - The National 7 standards are expected to create a market space exceeding 200 billion yuan in the automotive after-treatment sector from 2027 to 2030, driven by the need for new components and system upgrades [4][5] - Key areas of focus for new components under the National 7 standards include cold start emissions reduction, nitrogen oxide reduction, and monitoring system upgrades [4] - The projected incremental market space for automotive after-treatment is estimated at 244.2 billion yuan in 2027, increasing to 733.1 billion yuan by 2030 [5] Recommended Companies - Companies with strong technological capabilities and broad product layouts in the after-treatment sector are recommended for investment, including Yunyi Electric, Aikelan, Zhongzi Technology, and Weifu High-Tech [5]

Group 1 - The core viewpoint of the report emphasizes the importance of vehicle exhaust emission control as motor vehicle emissions have become a major source of air pollution, with NOx emissions from vehicles accounting for over 34% of the national total, and heavy-duty trucks contributing 80% of vehicle NOx emissions [1] - The report highlights that in major cities like Beijing, Shenzhen, and Chengdu, vehicle emissions contribute to over 40% of PM2.5 pollution, indicating a severe situation for vehicle exhaust management [1] - The report suggests that the implementation of the National VII standard will significantly expand the automotive after-treatment market, recommending attention to high-quality companies with strong technical capabilities and broad product layouts in the after-treatment sector [1] Group 2 - The European Union's Euro VII standard, which will replace Euro VI, is set to take effect in May 2024, providing a forward-looking reference for the formulation of the National VII standard [2] - Key changes from Euro VI to Euro VII include stricter limits on heavy-duty vehicle emissions, new requirements for non-exhaust pollutants, and upgraded monitoring systems for vehicle durability and battery performance [2] Group 3 - The National VII standard is progressing, with significant market opportunities expected in the automotive after-treatment sector, potentially exceeding 200 billion yuan from 2027 to 2030 [3] - The report anticipates that new components under the National VII standard will focus on cold start emissions reduction, nitrogen oxide reduction, and monitoring system upgrades, with specific new parts expected for both gasoline and diesel engines [3] - Based on predictions for component prices and vehicle production, the incremental market space for automotive after-treatment is projected to be 244.2 billion yuan in 2027, increasing to 733.1 billion yuan by 2030, totaling over 2 trillion yuan [3]