Category: Industry News

China’s NEV sales up 24% MoM to 653,000 in Mar, CAAM data show

The CAAM proposes that China's central and local governments continue to introduce policies to promote auto consumption, given the current weak market expectations.

China's NEV sales up 24% MoM to 653,000 in Mar, CAAM data show-CnEVPost

China's new energy vehicle (NEV) sales in March were 653,000 units, up 34.8 percent year-on-year and up 24.4 percent from February, according to data released today by the China Association of Automobile Manufacturers (CAAM).

The CAAM released data on wholesale sales by automakers, where NEVs include battery electric vehicles (BEVs), plug-in hybrid vehicles (PHEVs) and fuel cell vehicles.

China saw BEV sales of 490,000 units in March, up 23.8 percent year-on-year. PHEV sales were 163,000 units, up 84.3 percent year-on-year. Sales of fuel cell vehicles were 50 units, up 27 percent year-on-year.

China's NEV sales up 24% MoM to 653,000 in Mar, CAAM data show-CnEVPost

Sales of all vehicles in China were 2.451 million units in March, up 9.7 percent year-on-year and up 24 percent from February.

China's NEV sales up 24% MoM to 653,000 in Mar, CAAM data show-CnEVPost

This means that China's NEVs had a penetration rate of 26.6 percent in March, the same as in February.

China's NEV sales up 24% MoM to 653,000 in Mar, CAAM data show-CnEVPost

Production of NEVs in China was 674,000 units in March, up 44.8 percent year-on-year and up 22.1 percent from February.

Production of all vehicles in China was 2,584,000 units in March, up 15.3 percent year-on-year and 27.2 percent from February.

With purchase tax incentives for internal combustion engine vehicles and purchase subsidies for NEVs both expiring at the end of last year, coupled with price cuts since the beginning of the year, China's auto industry faced significant pressure in the first quarter, the CAAM said.

The CAAM proposes that China's central and local governments continue to introduce policies to promote auto consumption, given the current weak market expectations.

In March, exports of vehicles from China were 364,000 units, up 110 percent from a year earlier and up 10.6 percent from February.

Among them, the export volume of NEVs was 78,000 units, up 390 percent year-on-year but down 10.3 percent from February.

In January-March, China's vehicle sales were 6.076 million units, down 6.7 percent from a year earlier, according to the CAAM.

NEVs sold 1.586 million units in January-March, up 26.2 percent year-on-year, with a market share of 26.1 percent.

China's Mar passenger NEV retail up 23.6% MoM to 543,000, CPCA data show

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China’s Mar passenger NEV retail up 23.6% MoM to 543,000, CPCA data show

In retail, China's NEV penetration rate was 34.2 percent in March, up 6 percentage points from 28.2 percent in March 2022 and up from 31.6 percent in February.

Retail sales of new energy passenger vehicles (passenger NEVs) in China were 543,000 units in March, up 21.9 percent year-on-year and up 23.6 percent from February, according to data released by the China Passenger Car Association (CPCA) on April 10.

This is lower than the CPCA's preliminary figure of 549,000 units released on April 6, and lower than the 560,000 units it estimated in its March 25 report.

Battery electric vehicles (BEVs) continued to dominate, with 383,000 retail sales in March, accounting for 70.5 percent of all NEV retail sales. This represents a 6.4 percent year-on-year increase and a 30.1 percent increase from February.

Plug-in hybrid vehicles (PHEVs) accounted for 160,000 retail sales in March, contributing 29.5 percent of NEV retail sales, up 87.6 percent year-on-year and up 10.4 percent from February.

Retail sales of all passenger vehicles in China were 1,587,000 units in March, up 0.3 percent year-on-year and up 14.3 percent from February, according to the CPCA.

In terms of retail sales, China's NEV penetration rate was 34.2 percent in March, up 6 percentage points from 28.2 percent in March 2022 and up from 31.6 percent in February.

The penetration rate of NEVs was 54.7 percent for local brands, 33.6 percent for luxury brands and 4.2 percent for mainstream joint venture brands.

Wholesale sales of new energy passenger vehicles in China were 617,000 units in March, up 35.2 percent year-on-year and up 24.5 percent from February.

This represents a 31 percent penetration of NEVs at wholesale in March, up 6 percentage points from the 25.1 percent penetration in March 2022 and up from 30.6 percent in February.

Chinese domestic brands saw a NEV penetration of 46.4 percent at wholesale in March, compared to 36 percent for luxury brands and 3.7 percent for mainstream joint venture brands.

China exported 70,000 passenger NEVs in March, with BEVs accounting for 94.3 percent of the total.

SAIC passenger car unit exported 23,654 units, BYD 13,312 units and China 12,206 units in March.

The recent drop in the price of lithium carbonate has helped manufacturers launch more cost-effective NEV models, the CPCA said.

But at the same time, the recent price cuts by some NEV companies may trigger a wait-and-see mood among consumers, the CPCA said.

Tesla delivers 76,663 vehicles in China in Mar, exports 12,206 from Shanghai plant

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China’s Mar NEV retail sales at 549,000 units, preliminary CPCA data show

This was up 27 percent from February, but below the CPCA's estimate of around 560,000 units announced in late March.

Retail sales of new energy passenger vehicles (passenger NEVs) in China were 549,000 units in March, up 5 percent year-on-year and up 27 percent from February, preliminary figures released today by the China Passenger Car Association (CPCA) show.

Notably, the CPCA's estimate released on March 24 showed that retail sales of passenger NEVs in China in March were expected to be around 560,000 units.

The lower figure released today means that the NEV market performed weaker in the last week of March than the CPCA had expected.

In the first quarter, retail sales of passenger NEVs in China were 1.139 million units, up 15 percent from a year earlier, the CPCA said today.

Wholesale sales of passenger NEVs in China rose 32 percent to 599,000 units in March, up 21 percent from the previous month.

In the first quarter, wholesale sales of passenger NEVs in China were 1.483 million units, up 24 percent from a year earlier.

Retail sales of all passenger vehicles in China were 1.596 million units in March, flat from a year ago and up 17 percent from last February, according to the CPCA.

This means that the penetration of passenger NEVs at retail in March was 34.4 percent, up 2.8 percentage points from 31.6 percent in February.

In the first quarter, retail sales of all passenger vehicles in China were 4.275 million units, down 13 percent year-on-year.

Wholesale sales of passenger vehicles in China were 1.955 million units in March, up 7 percent year-on-year and up 22 percent from February.

In the first quarter, China's passenger car wholesale sales were 5.021 million units, down 8 percent year-on-year.

With a large number of car companies stepping up their promotions in March, demand for cars was concentrated, putting pressure on the normal order of the market, the CPCA said.

From the performance of the first four weeks of March, the conversion rate of customer traffic is not high, consumers were in a wait-and-see mood, and the overall demand was weak, the CPCA said.

Here are the CPCA's weekly retail sales data for the Chinese passenger vehicle market in March, as announced today:

Average daily retail sales of passenger vehicles in the first week of March were 31,000 units, down 16 percent year-on-year and down 14 percent from the same period in February.

Average daily sales for the second week of March were 37,000 units, down 18 percent year-on-year and down 8 percent from the same period in February.

Average daily sales for the third week of March were 41,000 units, up 10 percent year-on-year and up 7 percent from the same period in February.

Average daily sales for the fourth week of March were 46,000 units, up 18 percent year-on-year but down 35 percent from the same period in February.

Sales for the fifth week of March were reported at 115,000 units, up 3 percent year-on-year and up 63 percent from the same period in February.

China NEV insurance registrations for week ending April 2: BYD 46,218, Tesla 14,275, NIO 2,730

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Price wars fail to boost China’s auto consumption

With consumers in a wait-and-see mood, orders and transaction rates did not increase significantly, and auto demand recovered less than expected, the CADA said.

Price wars fail to boost China's auto consumption-CnEVPost

Many automakers in China launched rare price wars in March to try to boost sales. But these moves do not seem to have achieved the results they wanted.

In March, following significant promotions by automakers in Hubei province, dozens of provinces and cities, including Beijing, Tianjin, Shanghai and Zhejiang, offered deals that gave dealership store traffic a quick boost, the China Automobile Dealers Association (CADA) said in an April 3 report.

However, orders and transaction rates did not increase significantly as consumers were in a wait-and-see mood, and auto consumer demand did not recover as expected, the CADA said.

The Vehicle Inventory Alert Index for China's auto market was 62.4 percent in March, down 1.2 percentage points from a year ago but up 4.3 percentage points from February, according to the CADA report.

The index's break-even value is 50 percent, and a reading above that benchmark means the auto distribution industry is in contraction territory, according to the report.

China's switch to the 6b emissions standard was not the main reason for the wave of price cuts, the CADA said, adding that most dealers said their inventories of 6a-based vehicles are not high and could be cleared by the end of June.

However, there are still a large number of 6b-based vehicles that do not meet RDE (real-world driving emission) standards, and with lower-than-expected sales in the first quarter, these vehicles face challenges in completing inventory clearance by the end of June, the CADA said.

In March, vehicle prices were volatile and customer wait-and-see sentiment was strong, resulting in lower orders and turnover rates and a decline in dealer profitability, according to the report.

More than 60 percent of dealers said they met less than 80 percent of their sales targets in the first quarter. Of those, 20.5 percent of dealers achieved 70-80 percent of their sales targets and 46.0 percent achieved less than 70 percent, the CADA said.

Separately, the CADA said in another report on April 3 that the March auto consumption index was 72.5, down from 74.6 percent in February.

March auto sales did not meet expectations, and dealers predict that without major policy changes in April, auto sales will be essentially unchanged from March, the CADA said.

In March, the demand sub-index of the auto consumption index was 68.2, down from 73.3 in February, the CADA said, adding that this signals a decline in demand for cars in April.

Price wars fail to boost China's auto consumption-CnEVPost

China's Mar passenger NEV wholesale sales up 20% MoM to 600,000, CPCA estimates show

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Buick to launch Electra E5 electric SUV in China on Apr 13

The Electra E5, Buick's first electric model based on the Ultium platform, is a 5-seat SUV measuring 4,892 mm in length.

(Image credit: Buick)

General Motors' Buick brand will launch its first electric model based on the Ultium platform in China next week, in what could be one of the most anticipated EV offerings from a foreign brand here.

Buick will launch the Electra E5, a large five-seat all-electric SUV, in China on April 13 and will be offered in standard, long-range and Avenir four-wheel-drive versions, SAIC-GM, GM's joint venture in China, announced today.

The Electra E5 features the Pure Design concept, the new generation Virtual Cockpit System (VCS), and Buick eConnect network connectivity technology, SAIC-GM said.

The model will feature exclusive battery cells with a CLTC range of up to 620 km and can consume as little as 13.5 kWh per 100 km.

Its Avenir 4WD version will feature the Ultium 8-in-1 electric drive system with a permanent magnet synchronous motor in the front and an induction asynchronous motor in the rear.

The Avenir version uses a battery pack with a capacity of 80 kWh, offering strong performance and range, SAIC said.

China's Ministry of Industry and Information Technology released a list of models that will be allowed to be sold in China for public comment last November 16, and the Buick Electra was included.

The Electra E5, which entered the catalog at the time, has a single electric motor with 180 kW of peak power and a top speed of 180 km per hour.

The Buick Electra E5 measures 4,892 mm in length, 1,905 mm in width and 1,655 mm in height, and has a wheelbase of 2,954 mm, the filing data show.

Its power battery is a ternary lithium battery, and the supplier is a joint venture between Chinese power battery giant and SAIC.

The battery pack has a capacity of 68.4 kWh and will give the vehicle a CLTC range of 545 km.

Last December 19, Buick began warming up for the Electra E5, saying the model would be launched soon.

On December 28, Buick saw the first pilot vehicles of the Electra E5 roll off the line at the Ultium plant in Wuhan, Hubei province, central China.

Regulatory filing: Buick Electra all-electric SUV not far from launch in China

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China’s Mar passenger NEV wholesale sales up 20% MoM to 600,000, CPCA estimates show

In the first quarter, wholesale sales of new energy passenger vehicles in China are expected to be 1.48 million, up 25 percent year-on-year, the CPCA said.

China's March wholesale sales of new energy passenger vehicles (passenger NEVs) are expected to be 600,000 units, up 20 percent from February and up 30 percent year-on-year, the China Passenger Car Association (CPCA) said in a report today.

In February, the 10 manufacturers that sold more than 10,000 NEVs at wholesale contributed 83 percent of all wholesale sales, the CPCA said.

These companies are expected to sell 477,000 units in March, and the normal structure would put China's March wholesale sales of passenger NEVs above 570,000 units, the CPCA said.

Considering that some small and medium-sized companies' NEV sales improved significantly from February, the passenger car market in March could be optimistic, the CPCA said.

In the first quarter, wholesale sales of passenger NEVs in China are expected to be 1.48 million, up 25 percent year-on-year, the CPCA said.

China's passenger NEV sales fell sharply in January, as subsidies for the purchase of NEVs were withdrawn, as well as under the influence of the Chinese New Year holiday. The market gradually rebounded in February.

In March, China's passenger NEV market maintained a rebound despite disruptions from gasoline vehicle promotions, the CPCA said.

With recent lithium carbonate price reductions evident, some manufacturers actively allowed production and sales to slow down in the first quarter to reduce costs, the CPCA noted.

At one point in late November last year, battery-grade lithium carbonate was quoted at RMB 590,000 ($85,790) per ton in China, about 14 times the average RMB 41,000 per ton price in June 2020.

Since then, lithium carbonate offers have continued to move downward, without seeing a single day of gains this year.

Battery-grade lithium carbonate prices in China today fell RMB 8,500 per ton, or 3.66 percent, to RMB 224,000 per ton, according to Mysteel data monitored by CnEVPost.

Industrial-grade lithium carbonate fell RMB 6,000 per ton, or 3.08 percent, to RMB 189,000 per ton today.

($1 = RMB 6.8774)

Tesla sells 88,869 China-made vehicles in Mar, CPCA data show

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Hengchi 5 gets assisted driving capability days after Evergrande NEV warns of production halt risk

The H-Pilot assisted driving system is available for the first time for the Hengchi 5, giving the vehicle the ability to perform full-speed adaptive cruise control and lane keeping.

Hengchi 5 gets assisted driving capability days after Evergrande NEV warns of production halt risk-CnEVPost

Evergrande New Energy Vehicle Group (Evergrande NEV), the EV division of China Evergrande Group, brought an important software update to its first production model, even though it made an announcement two weeks ago that there was a risk of discontinuing production.

The Hengchi 5 received an OTA upgrade on April 3, with the H-Pilot assisted driving system available for the first time, Evergrande NEV said in articles on its social media accounts yesterday.

With the update, Hengchi 5 will see 12 controller (ECU) optimizations, 14 new features, and 25 functional optimizations.

With H-Pilot support, the Hengchi 5 will be able to achieve full-speed adaptive cruise control and lane-keeping on city streets as well as highways.

Hengchi 5 gets assisted driving capability days after Evergrande NEV warns of production halt risk-CnEVPost

The vehicle will also receive automatic emergency braking capability, which monitors the vehicle's environment in front of it in real time and automatically slows it down in the event of a potential collision.

Hengchi 5 also gains nine assisted driving features, including cornering speed assist, forward/rearward collision warning, lane departure warning, blind spot monitoring, and traffic sign recognition.

Hengchi will continue to bring users a better driving experience through OTA upgrades, the article said, adding that higher-level intelligent driving systems will be opened up next.

Hengchi 5 gets assisted driving capability days after Evergrande NEV warns of production halt risk-CnEVPost

Hengchi 5 is the first model of Evergrande NEV's Hengchi Auto in production, which opened for delivery on October 29, 2022.

The model is currently available in only one version with a starting price of RMB 179,000 ($26,010).

Here is a video about the OTA update posted by Hengchi on its Weibo account.

On December 2 last year, Reuters reported that Evergrande NEV had suspended mass production of the Hengchi 5 due to a lack of sufficient new orders for the SUV.

On March 23, Evergrande NEV said in a Hong Kong Stock Exchange announcement that it was at risk of suspending production without access to additional liquidity.

Hengchi 5 was in continuous volume production and has delivered more than 900 units, according to the announcement.

Trading in Evergrande NEV's shares in Hong Kong has been suspended since April 1, 2022, and a date for restarting trading has not yet been set.

($1 = RMB 6.8819)

Hengchi 5 gets assisted driving capability days after Evergrande NEV warns of production halt risk-CnEVPost

Evergrande NEV warns risks of production halt if it can't get additional liquidity

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China auto sales sluggish on consumer sentiment, improvement expected in Q2, says Deutsche Bank

Price wars have now become the consensus among investors, setting a relatively low bar for EV makers to beat.

(Image credit: CnEVPost)

Low consumer sentiment in the wake of the Covid wave has led to weak auto sales in China, though the situation is expected to see relief in the second quarter, and the launch of new models and lower lithium carbonate prices are also encouraging, according to Deutsche Bank.

The underlying cause of sluggish auto sales in China can be mostly attributed to consumer sentiment. After a quick Covid reopening, consumers prioritized spending on services but reduced purchases of durable goods, Deutsche Bank analyst Edison Yu's team said in a research note sent to investors today.

In the first two months of the year, China saw a 12 percent year-on-year increase in the dining and lodging sector, and spending on food, clothing, jewelry and even furniture also increased, the team said, adding that the only exceptions were cars and smartphones, with the former falling 13 percent year-on-year.

In addition, as automakers cut prices, consumers felt more compelled to wait for better deals, the team said.

Price wars are now the consensus among investors, which has set a relatively low bar for electric vehicle (EV) makers to beat, the team said.

"In particular, and XPEV will see a clear sales/margin trough in 1Q followed by a large upswing from new model launches and lower lithium carbonate prices (4-6% points gross margin tailwind)," the team wrote.

Looking ahead, Deutsche Bank's China macro team believes consumer spending on durable goods should normalize in the second half of this year.

The job market is expected to improve due to a strong recovery in the service sector, and the real estate market is also on track to recover, benefiting from substantial excess household savings and favorable lending policies, according to the note.

These could lead to an increase in consumer confidence, which in turn could lead to a recovery in spending on cars and other consumer durables.

While the price war initially focused on EVs, traditional internal combustion engine automakers have also begun offering big promotions to clear their inventories, especially for vehicles that do not meet China's new emissions standards.

As a sign of the height of the price war, there were reportedly Toyota dealers offering a free gasoline car with the purchase of its bZ4x EV, which has been suffering from sluggish demand. Volkswagen has also cut prices on internal combustion engine and EV models in its lineup, the team noted.

This has led to an even more challenging pricing environment that should last at least through the end of April, Yu's team said.

"Ultimately, we expect weaker players to get squeezed out of the market (e.g., Enovate, Leap Motor, WM) and more stable pricing to emerge," the team wrote.

For the second quarter, the team continues to see industry volume growth and has raised its NEV retail sales forecast from 1.65 million to 1.75 million, implying a 32 percent quarter-on-quarter increase, a 49 percent year-on-year increase, and a 35 percent penetration rate.

Here's the team's take on the performance of the major EV makers that have already announced March deliveries.

March OEM recap

Li Auto delivered 20,823 vehicles (+25% MoM, +89% YoY), below our forecast. However, this still translated to nearly 20% market share of the 300-500k RMB premium SUV market in China. The new L7 five-seat SUV began deliveries in March and will see volume grow sequentially.

The company exited the month with 299 retail stores and 318 servicing centers.

NIO delivered 10,378 units (-15% MoM, +4% YoY), below our forecast. De-stocking of older 866 gen-1 models seems to be nearing an end.

Additionally, a face-lift is coming for the ET7 which is likely suppressing demand for that model. NIO exited the month with 1,339 battery swap stations and 1,285 fast charging stations.

XPeng delivered 7,002 units (+17% MoM; -55% YoY), below our expectations. P7 did sell 3,030 units though, representing a 32% sequential improvement. The P7i face-lift should help volume in 2Q as management expressed confidence in the initial order book.

also began the rollout of the first part of its XNGP high level ADAS platform in Guangzhou, Shenzhen, and Shanghai, enabling city pilot capabilities for its newest models.

Initially, the systems will still use HD mapping but this will be phased out in 2H23 allowing the full capabilities of XNGP to work in greater number of cities.

The company believes its software perception running on XNET deep neural network training will allow it to reduce reliance on HD mapping which only a few large cities have available.

delivered 6,663 vehicles (+22% MoM; +271% YoY).

NIO delivers 10,378 vehicles in Mar, down 14.6% from Feb

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Seres unveils new NEV brand Landian and 1st model E5 with BYD, Huawei technology

The Landian E5 is a mid-size plug-in hybrid SUV with a starting price of RMB 139,900.

Chinese tech giant 's key partner in the automotive sector, Seres Group, has launched another new energy vehicle (NEV) brand to increase its bets in the sector.

Seres today officially unveiled the Landian (蓝电) brand and made its first model, the plug-in hybrid E5, available with technology from Huawei and , according to an online launch event.

Landian literally means blue electricity in Chinese. The brand is positioned as a builder of the Internet of Everything ecosystem in the "E era", where the letter E refers to Electric.

By 2023, the Landian brand will build 340 experience stores and 160 delivery centers, Seres said.

The Landian E5 is a mid-size SUV, available in five- and seven-seat versions. It measures 4,760 mm in length, 1,865 mm in width and 1,710 mm in height, and has a wheelbase of 2,785 mm.

The car is available in two versions with starting prices of RMB 139,900 ($20,330) and RMB 151,900 respectively.

The Landian E5 is powered by Seres' DE-i electric drive platform, which uses the F31A 1.5L PHEV-specific engine and DHT300 electric hybrid system from BYD's FinDreams Power.

The engine has a maximum power of 81 kW and a maximum torque of 135 Nm, while the electric motor has a maximum power of 130 kW and a maximum torque of 300 Nm. It can accelerate from 0 to 100 km/h in 7.4 seconds.

The car has an NEDC range of 100 km, 110 km on battery power and a combined WLTC range of 1,150 km on full fuel and full charge.

The Landian E5 is equipped with Huawei's HiCar 3.0 system, a lite version of HarmonyOS for cars, but supports features including seamless connectivity with cell phones.

Chongqing-based Seres Group was renamed from Chongqing Sokon Industrial Group in July 2022. It is Huawei's most important partner in the automotive industry to date.

Huawei announced on April 20, 2021 that the company officially started selling cars, with the Seres SF5 from the Seres Group's Seres brand being the first model to enter its channels.

The Seres brand announced the launch of a premium NEV brand called AITO with Huawei on December 2, 2021, and has already launched models including the M5 and M7.

Seres Group sold 12,773 vehicles in February, including 6,577 NEVs, according to figures it announced earlier this month.

On February 25, the Seres brand and Huawei signed an agreement on deepening their joint business, which will see the two jointly launch a new vehicle platform, the first flagship model of which is scheduled for release in 2023.

Seres unveiled aggressive plans at the time, saying the joint business aims to see annual sales of NEVs reach 1 million units by 2026.

($1 = RMB 6.8813)

Seres, Huawei sign deal on joint business, aim to sell 1 million NEVs by 2026

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Analysts explain how falling lithium carbonate prices affect EV costs

For an EV with a 70-kWh pack, the cost of the battery is now RMB 12,300 - RMB 14,500 lower than when lithium carbonate prices were at their previous high, analysts say.

Analysts explain how falling lithium carbonate prices affect EV costs-CnEVPost

Falling lithium carbonate prices are known to benefit the profitability of electric vehicle (EV) makers. So how will this price change affect the cost of EVs? A new research note provides a good analysis.

An EV powered by a lithium iron phosphate (LFP) battery typically uses 30-40 kilograms of lithium carbonate, while an EV with a ternary lithium battery consumes 50-70 kilograms of the material, said Haitong International Securities analyst Yang Bin's team in a research note today.

When the price of lithium carbonate drops by RMB 100,000 ($14,540) per ton, the cost of ternary lithium batteries and LFP batteries will see marginal decreases of RMB 60 to RMB 70 per kWh, respectively, the team's calculations show.

In this case, the battery cost would be RMB 4,200 to RMB 4,900 lower for an all-electric vehicle with a 70-kWh battery capacity.

This means that the current battery cost of an all-electric vehicle with a 70-kWh battery capacity is already RMB 12,300 - RMB 14,500 lower than when lithium carbonate prices were at their previous high, the team said.

As a backdrop, lithium carbonate prices have never seen a single day of gains in China this year and continue to fall by several thousand RMB today, according to data from Mysteel.

The average price of battery-grade lithium carbonate per ton in China fell by RMB 7,500 to RMB 256,500 today, down about 57 percent from RMB 590,000,000 last November. The average price of industrial grade lithium carbonate per ton also fell by RMB 7,500 to RMB 210,000 today.

Falling battery costs will drive down the overall cost of EVs, which will allow automakers to see their gross margins repair, according to Haitong's research note.

However, the team also noted that in the long run, automakers need to achieve technology upgrades, reduce costs and improve competitiveness in order to capture sufficient market share and profitability, considering EV penetration is already high in China.

With lower lithium carbonate prices, EV makers will have more room for pricing as they gain greater profit margins, the team said, adding that this is expected to allow them to gain greater market share by cutting prices.

Although the price of lithium carbonate has fallen by more than half from its high a few months ago, the team believes there is still room to fall.

In 2022, China's lithium resource supply was 727,000 tons and demand was 796,000 tons, the team said.

In 2023, China's lithium resource supply is expected to reach 1.088 million tons and demand is expected to be 1.034 million tons, according to the team.

With the supply of lithium resources outstripping demand, there is still room for lithium carbonate prices to fall, with the price of battery grade lithium carbonate expected to fall to around RMB 200,000 per ton by the end of 2023, the team said.

($1 = RMB 6.8772)

Panic selling of lithium carbonate just won't stop

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