China’s NEV output, sales clock first annual growth for 2020 in July
China’s output and sales of new energy vehicles (NEVs) rose for the first time on an annual comparison this year in July, but figures were down slightly against June.
China produced 100,000 NEVs in July, including pure electric vehicles (PEVs) and plug-in hybrids. This was an increase of 15.6% from July 2019, but a fall of 2.4% from June this year, according to data released by the China Association of Automobile Manufacturers (CAAM).
In July, Chinese automakers produced 71,000 PEVs, up by 32.9% from the corresponding month last year, and up by 5.2% from June 2020. Plug-in hybrids made up 21,000 units, up by 8% year on year, but down by 8.9% month on month.
Sales of NEVs totaled 98,000 units in July, up by 19.3% year on year, but down by 5.5% month on month. PEV sales rose by 38.1% year on year to 70,000 units, but fell by 3% from June volumes. Sales of plug-in hybrids were up by 3.2% from a year earlier at 19,000 units, but down by 5.6% month on month.
This was the first annual growth for Chinese NEV output and sales of the year. But this follows the first ever negative growth in July 2019 due to the end of the transitional period for NEV subsidies at the end of June 2019, which suppressed demand for NEVs.
Over January-July 2020, China produced 496,000 NEVs, down by 31.7% from the corresponding months a year earlier, and total sales also fell over the same period to 486,000 units, down by 32.8%.
In the same seven-month comparison, output of PEVs fell by 36.3% to 333,000 units and output of plug-in hybrids decreased by 17.6% to 114,000 units. Sales of PEVs were down by 35.2% to 332,000 units and sales of plug-in hybrids totaled 105,000 units, down by 26.8%.
CAAM expects China’s NEV market will maintain relative steady growth for the rest of 2020 and maintained its estimated total sales of NEV in 2020 of 1.1 million units.
“After a long drawn out downturn in Chinese NEV sales, that did initially start to see some month-on-month improvement at the end of the year  - only to be dashed by the hit from Covid-19, it is really encouraging to see year-on-year growth again in July. With China’s EV sales turning the corner and with impressive EV sales data out of Europe, the demand side of the lithium-ion battery story is looking bright again,” head of base metals and battery research at Fastmarkets William Adams said.
“The brighter demand outlook will help start to rebalance the market, but it will take time as there is excess inventory along the supply chain and idle capacity too, but with demand rising again and likely to accelerate, it is all the more important that we now focus and invest in the next generation of lithium projects.”
Upstream, the price of lithium, one of the key materials widely used in batteries for NEVs, has held steady in recent weeks with some producers continued insisting on firm prices given recent slightly improved downstream demand and firm industrial-grade material prices, despite buyers’ unwillingness to accept any increase.
Fastmarkets’ weekly price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 37,000-41,000 yuan per tonne ($5,312-5,887) on Thursday August 6, unchanged since July 9, but down from 45,000-51,000 yuan per tonne on February 27, when the assessment started to fall this year.