China to soon release NEV development plan for 2021-2035

Singapore — China will soon release the development plan for new energy vehicles, or NEVs, for 2021-2035 to stabilize and expand consumption of electric vehicles and other hybrid cars, the Ministry of Industry and Information Technology said Wednesday.

China has launched a series of measures to boost the demand for NEVs this year, which are likely to bear fruits in the longer run, according to some market observers.

China's NEV output is set to reach 1.6 million units in 2020, up 23% from a year earlier, China Securities Journal quoted Cui Dongshu, the secretary general of China Passenger Car Association, as saying.

The forecast comes as the country's daily retail sales of passenger cars declined 36% on the year to 30,683 units in March, according to the data provided by China Passenger Car Association Wednesday.

The association said demand for passenger cars is unlikely to see an explosive growth in the short term due to a lack of consumer confidence.

MIIT released a draft proposal on December 3 outlining the NEV industry development for 2021-2035.

Sales of new energy vehicle were expected to make up 25% of the total new car sales by 2025, according to the proposal. The target was equivalent to about 7 million units, given the total sales of 28.1 million units in 2018, according to S&P Global Platts calculations.

Meanwhile, China's battery metals market remained subdued as the industry is yet to see a pick up in NEV demand amid lackluster sentiment.

Chinese domestic lithium carbonate prices recorded their third consecutive weekly fall last week due to sluggish demand and no sight of recovery, at least in the near term.

Platts assessed battery grade lithium carbonate Yuan 800/mt ($113/mt) lower at Yuan 46,000/mt ($6,511/mt) Friday and lithium hydroxide steady at Yuan 53,000/mt. Both assessments are on a delivered, duty paid China basis.