Estimated Drop in EV Sales Likely to Impact Electrolyte Market in Separate Manners
- 28-Nov-2022 5:29 PM
- Journalist: S. Jayavikraman
New Delhi: In the past couple of weeks, the Lithium derivatives market in China witnessed major changes. As the deadline for government New Energy Vehicle (NEV) subsidies is approaching, the deadline and as per the market sources, it will likely revoke by January 2023. The cumulative impact is visible as BYD (China NEV automaker) raised the offers of its three Electric Vehicles models by USD 300 (approx.) by citing the expiration of subsidy plans in some provinces across China.
The overall impact was visible, as the data released by China Passenger Car Association (CPCA) showcased that the sales for the NEV soared to historic highs by the end of the third quarter of 2022, with an estimated figure of 676,000 units. Whereas, in October 2022, the sale remained persistent on an upward trajectory. However, the growth percentage dropped by 11% to 1000 units in October, as the new buyers showcased a clear indication of their reluctance to purchase EVs. Earlier in January 2022, the Chinese Ministry of Finance announced about as the spokesperson while addressing the curtailment of 30% government subsidies for private New Energy Vehicle players.
Several market experts believe that the figures will depreciate further, and the domestic market players are aware of the upcoming changes in the domestic market. The reorder for the essential raw materials has dropped, and as of now, the EV manufacturers have sufficient inventories for the next four months. It is further expected that the electrolytes market will witness a significant impact against the cathode materials (e.g., Lithium and derivatives). The Propylene Carbonate market will remain in the spotlight, as the feedstock cost support is inadequate, and the prices of Crude Oil in the international market have consistently depreciated amid low demand.
According to the ChemAnalyst Pricing Intelligence, the offers for Propylene Carbonate, Ethylene Carbonate, and Dimethyl Carbonate will trace a downward trend in the first quarter of 2023. As the offtakes from the manufacturers drop, the reorder will likely remain average in December 2022. In addition, the discussions for Cathode materials were likely to remain stagnant as the demand for Lithium derivatives is likely to remain high and witness a little to slight impact in the offered quotations.