Category

Countries

Revocation of New Energy Vehicle Subsidies Will Impact the Lithium Market in China

Revocation of New Energy Vehicle Subsidies Will Impact the Lithium Market in China

Revocation of New Energy Vehicle Subsidies Will Impact the Lithium Market in China

  • 22-Nov-2022 6:55 PM
  • Journalist: Robert Hume

Singapore: In recent weeks, speculation about the production curtailments by global power battery manufacturers has been circulating consistently. As per the market experts, the claims have substantial ground, supported by the decline in demand growth amidst the current economic downturn and high battery material prices, further coupled with the cancellation of New Energy Vehicles (NEV) subsidies. In addition, if the market persists with such conditions, it will soon likely impact the quotes for Lithium derivatives, such as Lithium Carbonate (Li2CO3), Lithium Hydroxide (LiOH), Lithium Hexafluorophosphate (LiPF6), Lithium Iron Phosphates (LFP).

The subsidies provided by the Chinese authorities led to an enormous growth in EV sales in the domestic market. The October stats showcased that 450,000 (approx.) units of NEV were insured, with a sharp increment of 54.64% from 291,000 units in October 2021. Although, despite such promising figures, sales have dropped by 17% on a month-on-month basis. The crucial OEMs in China stated that the offtakes have retreated for the first time in more than half a year.

The crucial EV battery manufacturers traditionally have four months of the battery cell and raw material inventories. However, the manufacturers showcased clear indications for reducing the offtakes of active cathode material (vital Lithium derivatives) and electrolytes ranging between 20%-30% depending on specific product availability. In addition, the follow-up offtakes for materials were also likely to stagger on lower levels.   

According to ChemAnalyst, the subsidies for New Energy Vehicles (NEVs) will likely be revoked by the end of the first quarter of 2023, as it is anticipated that the current quarter is the last season for the subsidies. In addition, the Lithium Iron Phosphate and Lithium Hexafluorophosphate enterprises are firmly pessimists about the upcoming demand outlook. However, the impact of the fluctuation in demand from downstream Lithium derivatives will be significant but not exaggerated on a vast margin as the offtakes from the overseas market will remain high amidst the rapid expansion of the EV Automotive domain. 

24X7

Track Real Time Prices

Related News

Unlocking Global Lithium Production with Argentina's Rincon and Antofalla Salars
  • 20-Mar-2023 12:38 PM
  • Journalist: Bob Duffler
Lithium Prices Crash to Bottom in 12 Months
  • 17-Mar-2023 12:07 PM
  • Journalist: Jai Sen
Lithium Americas Kicks Off Building of Thacker Pass Project in Nevada
  • 06-Mar-2023 12:06 PM
  • Journalist: Robert Hume
Argosy Commences Batch Production of Lithium Carbonate in Rincon, Full-Scale Production By Q2-2023
  • 03-Mar-2023 11:12 AM
  • Journalist: Francis Stokes