Electric Vehicle Market Outlook on the Upstream Chemicals– First Quarter of 2022

The Electric Vehicles market share across the globe has observed a steep increment in the past couple of years, whereas compared to the last decade, the market share surged by 43 times last year. Electric Vehicle sales surged by 109%, and reached 7.75 billion. After COP 26 Glasgow, within the scope of combating the rising temperature, various nations have accelerated the transition towards EVs from the ICVs to reduce fossil fuel consumption. In adhere reaction, the demand for the critical raw materials soared drastically, strengthening the producer's will to raise the offered quotations for the EV Chemicals.

The sales of the Electric Vehicles showcased a significant improvement since the start of 2021, with China leading this domain after the sales jumped tremendously by 155% in the domestic market alone. Several major players and conglomerates were pouring their investments to ensure the long-term supplies of raw materials such as Lithium Carbonate, Lithium Hydroxide, etc. They were further followed by a bidding war to win the mining contracts in the South American region and rigorous competition to capture the larger market share. The Chinese market gained the market sentiments as being an early mover in the EV chemicals domain. In addition, it laid out the impact on the critical metals used during the manufacturing of the batteries, such as Nickle, that shot upwards unprecedentedly last month. Whereas the prices of Lithium Carbonate soared by 350% - 370% on the year-on-year basis due to persistent inquiries from the domestic and overeseas market throughout the period.

In the Southeast Asian region, the Indian market dominated in terms of retail sales. As of April 2022, the market observed retail sales crossing the 400,000 units mark, although the region lacks the infrastructure capabilities to cope with the rising demand in the domestic market. At the same time, several analyses conducted by the automobile dealers body FADA to assess the market outlook concludes that the Indian market is likely to zoom over three-fold in the FY-2022. These projections were backed after gathering and assessing data from 1397 of 1605 regional transport offices. In addition, a similar trend is also witnessed in the Oceania region due to the rising fuel prices and climate concerns driving the demand sentiments in the country like Australia. Still, the limited availability shot up the waiting list for Electric Vehicles to a new high, and waiting times have blown out by months. The shortage was severe in Australia, as the EV producers don't tend to prioritize Australia because the Australian authorities prioritize the adoption and don't have robust incentive schemes like other countries to cater to the transition. As a ripple effect, the second-hand rates for EVs in Australia were 10%-15% higher than the retail market price.

The market strengthened persistently in North America and the European markets. New projects and joint ventures were filed in the SEC to cater to the rising market demand for EVs. Besides that, new investments were made to develop alternatives to counter and bypass the current market competitiveness. Whereas the South American market showcased several progressive developments to cater to the rising appetite for battery raw materials and new mining projects were commissioned under strict scrutiny to maintain a sustainable transition towards a greener economy.

As per ChemAnalyst, the perisitently soaring demand will likely to soar the prices but the intervention of the Chinese authorities to cross-check the basis for the increment in the offers and resurgance of COVID restricts the growth currently, and several key ingredients observed a sharp drop for a short term. These developments will help to sustain a healthy transition.