• 545 days Will The ECB Continue To Hike Rates?
  • 545 days Forbes: Aramco Remains Largest Company In The Middle East
  • 547 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 947 days Could Crypto Overtake Traditional Investment?
  • 952 days Americans Still Quitting Jobs At Record Pace
  • 954 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 957 days Is The Dollar Too Strong?
  • 957 days Big Tech Disappoints Investors on Earnings Calls
  • 958 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 960 days China Is Quietly Trying To Distance Itself From Russia
  • 960 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 964 days Crypto Investors Won Big In 2021
  • 964 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 965 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 967 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 968 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 971 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 972 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 972 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 974 days Are NFTs About To Take Over Gaming?
Tesla's Biggest Competitor Is Going Cobalt-Free

Tesla's Biggest Competitor Is Going Cobalt-Free

The world’s second-largest electric vehicle…

EV Metal Index Soars To Record Heights

EV Metal Index Soars To Record Heights

The MINING.COM EV Metal Index,…

Mining.com

Mining.com

Mining.com

MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry…

Contact Author

  1. Home
  2. Commodities
  3. Industrial Metals

What Does CHina’s EV Slowdown Mean For The Battery Metals Sector?

China's EV Slowdown

The slowdown in China’s electric vehicle sector could have knock-on effects on the battery metals market in both the short and long run, commodities analysts at Argus Media said in a new report.

A weaker economy and lower new energy vehicle (NEV) subsidies that were introduced in 2019 led to a drop in Chinese vehicle production and sales last year.

Overall, China produced 1.24 million NEVs during the year, down 2.3% from the 1.27 million produced in 2018, and significantly lower than the initial production target of 1.5 million NEVs. The country sold 1.21 million NEVs last year, a 4% drop from 1.26 million in 2018, Argus.

China currently represents almost 60% of global electric vehicle (EV) sales, according to data compiled by Argus, and a weaker industry in China has disproportionate effects on the global market.

The coronavirus outbreak has put further downward pressure on the sector at the start of 2020 and is expected to continue to weigh on China’s NEV market, with domestic production and sales forecast to fall in the first quarter.

Buying interest for NEVs is expected to weaken significantly in the short term as potential buyers have opted to stay at home to prevent infections, Argus analysts predicted.

In January, China produced only 40,000 NEVs, down by 55% from a year earlier and by 74% from 149,000 units in December 2019. January sales were 44,000, down by 54% from a year earlier and by 73% from 163,000 in December.

Production plants in Hubei province, the source of the virus outbreak, account for around 8-9% of China’s automotive output, but plants country-wide have been affected by the crisis. Several manufacturers including the 40,000 units/yr NIO, 150,000 units/yr Xiaopeng and 300,000 units/yr Lixiang plants have postponed deliveries.

(Click to enlarge)

The slowdown in China would also hinder the prospects for global growth, given the country’s lead in EV production and dominance in the global marketplace. Initial forecasts for global EV sales of over 2.5 million units for 2019 (a rise of over 25%) already proved to be over-optimistic, and predictions for sales in 2020 will have to be revised accordingly, said Argus.

Originally, Argus had forecasted global EV sales of almost 3.2 million units for 2020: 1.95 million in China and 1.24 million in the rest of the world. However, the firm expects China to struggle to match its EV sales in 2019 with the fraught start to the year, while sales in the rest of the world are unlikely to make up the shortfall.

As a result, Argus is now forecasting global EV sales of just under 2.1 million units in 2020, a 1.4% drop from 2019.

The knock-on effect of this hiccup in the EV growth story is that the longer term forecast for EV sales could be over 20% lower by 2030 than originally estimated, or as many as 5 million units lower in absolute terms, Argus analysts estimated.

By Mining.com 

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment