China's EV sales fall in April after two months of gains: CAAM

China's new energy vehicle sales fell 2.6% in April to 636,000 units compared with March, after rising for two months, data from the China Association of Automobile Manufacturers showed May 11.

CAAM classifies new energy vehicles as pure and hybrid electric vehicles and fuel-cell EVs.

NEV output in April also fell 5% to 640,000 units, CAAM said.

However, China's NEV output and sales in April were still higher compared to the year-ago period, posting a year-on-year increase of 105.1% and 112.7% respectively.

The higher production and sales numbers were mostly due to the low base in the same period last year when lockdown measures clamped down economic activity in China.

NEV sales accounted for 29.5% of the country's total vehicle sales in April, now remaining above the 20% mark for 14 straight months, S&P Global Commodity Insights calculations showed.

In view of significant reduction in fuel vehicle sales in March, many consumers preferred to sit on the sidelines, impacting overall vehicle sales in April, industry insiders said.

Chinese automakers are facing pressure at a time when the domestic economy is in recovery mode and demand remains soft, CAAM said.

Targeted policies are needed to stabilize and expand domestic vehicle consumption, the association added.

Future growth for China's vehicle market lies in the country's rural areas, while plans to launch EV policy for the rural market is still in the works, Shanghai Securities Journal cited Xu Haidong, deputy chief engineer of CAAM, as saying.

China will be accelerating the construction of charging infrastructure in rural areas to promote EV sales and boost consumption, China's Premier Li Qiang said in the executive meeting of the State Council May 5.

Lithium prices

Chinese lithium carbonate prices have been on an uptrend since April 17, fueled by the expectations of recovering downstream demand.

Market sources expected prices to continue rising in the near term, as downstream battery and EV makers are almost on the brink of using up their inventories.

Meanwhile, US EV maker Tesla's recent increase of its vehicle sales prices also boosted market sentiment, sources said.

However, whether the price rebound in lithium is sustainable depends on the recovery of downstream demand, sources added.

Platts, part of S&P Global, assessed battery-grade lithium carbonate at Yuan 230,000/mt ($33,155/mt) May 11 on a DDP China basis, up both Yuan 15,000/mt on the day and Yuan 50,000/mt on the week.

The prices have increased by Yuan 78,000/mt compared to April 17 when prices were at the lowest level since September 2021.

A domestic lithium salts producer auctioned 600 mt of lithium carbonate in 15 batches May 11, with the lowest bidding price at Yuan 241,000/mt and the highest at Yuan 251,000/mt, taking the markets by surprise as some considered the bid very high, sources said.

Power battery output

China's output of power batteries reached 47 GWh in April, up 38.7% from a year earlier, according to separate data released by the China Automobile Battery Innovation Alliance. But the output reported a month-on-month decrease of 8.3%.

The country's power battery output totaled 176.9 GWh in the first four months of this year, up 28.7% from a year earlier.

The power battery sector is a consumer of battery metals.