Metals & Mining Theme, Non-Ferrous

October 29, 2024

China asks central party, state institutions to lead the way in using EVs

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HIGHLIGHTS

China EV sales to keep strong growth amid stimulus measures

China lithium carbonate market still under downside pressure

China has asked administrative units at all levels and various public institutions of both the central and state sector to take the lead in the use of electric vehicles, at a time when the country’s total EV sales are expected to remain robust while domestic lithium prices have stayed rangebound at low levels.

Market sources are keeping a close on on whether recent stimulus measures to boost EV sales will finally drive lithium salts demand higher.

Administrative units at all levels as well as the central party and state institutions were asked to prioritize the use of EVs for public affairs and keep a minimum proportion of EVs in new and updated official vehicles at 30% in the year, according to a statement released by National Government Offices Administration late Oct. 28.

Moreover, the price of official cars should not be higher than Yuan 180,000 ($25,206) per unit and the installation of charging facilities is also encouraged, the document showed.

China decided to allocate approximately Yuan 300 billion (about $42 billion) ultra-long special treasury bonds to boost its trade-in program in July, which would support the scrapping and renewal of old service trucks, raise subsidies for new energy city buses and power batteries replacement, as well as increase subsidies for scrapping and renewing vehicles.

The one-time fixed subsidy to personal consumers who scrap passenger cars that meet emission standards of China III or below, or those NEVs registered before April 30, 2018, has been doubled.

China’s EV sales are expected to keep rising in October -- the traditional peak season thanks to stimulus measures to boost vehicle sales, industry sources said. In the meantime, the country’s total EV sales could amount to nearly 12 million units in 2024, higher than a forecast of 11.5 million units made earlier this year, according to the China Association of Automobile Manufacturers.

Sales of EVs in September surpassed those of fuel cars for a second straight month, reaching 51.8% of the Chinese domestic market, according to CAAM data.

Battery metals prices

Despite the expected strong growth for EV output and sales, the Chinese lithium chemicals market could face downside pressure going into November, after a wave of slight rebounds seen since September, sources said.

Demand from downstream consumers is expected to gradually soften as it enters a seasonal lull. However, production costs will lend some support to prices, keeping them from falling too much, sources said.

Platts, part of S&P Global Commodity Insights, assessed battery-grade lithium carbonate at Yuan 75,000/mt ($10,502/mt) on a DDP China basis on Oct. 28, up Yuan 1,500/mt on the day but down Yuan 500/mt from a month ago.


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