Weichai Power Co., Ltd. Business Report FY ended Dec. 2022

Financial Overview

(CNY millions)

	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021	Change (%)
Sales	175,157.54	203,547.70	(20.46)
Operating profit	5,834.03	13,888.99	(59.17)
Ordinary income	6,085.21	14,054.79	(57.92)
Net income	5,682.69	11,561.89	(53.36)

-In the fiscal year ended December 2022, sales volumes in the heavy-duty truck industry decreased significantly year-over-year, and the performance of the Company's heavy-duty truck-related business also declined significantly.

New Product

-The Company launched the commercialized product of its high-power metal-supported solid oxide fuel cell (MSSOFC), which has received European CE certification from the international testing institution, TÜV SÜD. It achieves an electricity generation efficiency of over 60% and a combined heat and power (CHP) efficiency of 92.55%. (From a press release dated February 18, 2023)

-The Company announced the launch of the first commercial diesel engine and natural gas engine with respective intrinsic thermal efficiencies of 52.28% and 54.16%, respectively; the first in the world. The company launched a diesel engine with an intrinsic thermal efficiency of over 50.23% in 2020 and another with 51.09% in January 2022. (From a Weichai Power official WeChat account press release dated November 20, 2022)

-The Company announced the release of a diesel engine with a thermal efficiency of 51.09%. TÜV SÜD, an international test agency located in Germany, issued a certificate of thermal efficiency reaching 51.09% for this diesel engine. At the same time, Weichai Power showcased multi-scenario demonstrative applications, including hydrogen-powered industrial parks, ports, and expressways. (From a press release dated January 8, 2022)

Orders

-The Company announced the launch of the X6000, a Shaanxi Automobile heavy-duty truck equipped with the WP14H engine, which is suitable for trunk road transport with a displacement of 13.5L and a maximum power of 610Ps. It adopts the world’s first diesel engine technology with a ground-breaking intrinsic thermal efficiency of 51.09% and low friction loss measures as well as high efficiency and low heat transfer combustion technology. (From a Weichai Power official WeChat account press release dated October 22, 2022)

-In the fiscal year ended December 2022, the Company will supply approximately 99,000 heavy-duty truck engines and 130,000 light-duty truck engines to China National Heavy Duty Truck Group (Sinotruck). (From the material released by the Hong Kong Stock Exchange of China National Heavy Industries Group Ltd. dated March 4, 2022)

Strategic partnership

-MAHLE Holding (China) Co., Ltd. (MAHLE China) entered a strategic alliance with Weichai Power. In the field of internal combustion engines, the two companies mainly aim to improve the reliability, carbon emissions, and thermal efficiency of medium- and heavy-duty engines. In addition, they will develop new energy power sources such as hydrogen. The scope of the partnership covers MAHLE’s engine components, filter systems, engine peripherals, thermal management, automotive electronics and mechatronics, natural gas, hydrogen energy and other related products. (From a MAHLE China press release dated February 14, 2023)

Exhibition

-The Company announced that at the Middle East Energy 2023 energy exhibition held in Dubai, UAE, the company debuted the 8M33 engine under the Baudouin brand. In addition, Weichai Power exhibited the Baudouin 16M55 large-bore engine, gas engines produced by U.S. brand PSI, and lithium battery energy storage devices. (From a press release dated March 10, 2023)

-The Company announced that it exhibited multiple products at the IAA Transportation 2022 show in Hanover, Germany. At the show, Weichai Power exhibited high thermal efficiency products built on the H platform, with displacements ranging from 2L to 15.3L, and power ranging from 190 horsepower to 660 horsepower. The company also displayed the WP13H commercial vehicle powertrain using its unique 51.09% high thermal efficiency technology. In the field of new energy, Weichai Power exhibited products such as the 260kW hydrogen fuel cell engine, the 15L hydrogen internal combustion engine, the WPH12 hybrid powertrain, and an e-axle drive system. The WPH12 hybrid powertrain meets the future needs for efficiency and cleanliness, providing technical reserves for the Euro-7 emission standards. (From a press release dated September 22, 2022)

R&D Expenditure

	FY ended Dec. 31, 2022	FY ended Dec. 31, 2021	FY ended Dec. 31, 2020
R&D expenditure (CNY millions)	8,850.90	8,568.71	8,294,09
R&D expenses as a percent of Sales (%)	5.05	4.21	4.20

-As of Dec. 31, 2022, the Company has 13,850 R&D staff, accounting for 15.93% of the total staff.

R&D

Project	Detail	Progress
WP2.5N diesel engine SCR technology (Selective Catalytic Reduction) development for China-6 standards	For the blue license plate market (trucks weighing less than 4.5 tons)	Final test stage
WP8H diesel engine development for China-6 standards	Development of a competitive medium-sized engine	Completed development, put to market
WP14T diesel engine development for China-6 standards	Enhance the competitiveness of the company in the 500 horsepower or more product field	Completed development, released to market
Development of electronic control system for coordinated control of engine and AMT	Improved synergy and development efficiency of conventional powertrain systems	Completed
Development and optimization of pure electrification system for light-duty trucks	Developed pure electrification system for light trucks to meet customer needs	Completed development, released to market
Development of hybrid system for heavy-duty trucks	Development of hybrid system for heavy-duty trucks	Completed development, released to market
Research on high specific energy sulfide solid state lithium batteries	Strengthen all-solid-state lithium battery technology and increase product competitiveness	Completed
Autonomous driving system development	Development of a general-purpose automated driving system capable of rapid iteration	Test completed

R&D Facilities

-The Company has R&D centers in China, Japan and Austria.

Certification

-The Company announced that its New Energy Test Center passed the review of CNAS (China National Accreditation Service for Conformity Assessment), and has the ability to develop and test the entire technology chain of hydrogen fuel cells and solid oxide fuel cells. The test center was completed and put into service in 2019. It has more than 100 sets of professional instrument testing equipment such as those for full cell parts and systems, including system test benches with altitude environment simulation, and high-power stack test benches with environment simulation. This facility supports the R&D and testing of hydrogen engines, stacks and core parts covering multi-purposes, multi-power segments, and various types. (From a press release dated March 9, 2022)