China’s NEV sales rise to year-to-date high in September

China's NEV sales reached a year-to-date high of 1.6 million units in September, up 15% on the month and 24.6% higher on the year, according to data from the China Association of Automobile Manufacturers (CAAM) released Oct. 14.

NEV production also witnessed an impressive uptick, reaching 1.62 million units, up 16.3% from August and 23.7% year over year.

NEVs accounted for a striking 49.7% of total vehicle sales in September, maintaining a position above the 40% threshold for the eighth consecutive month, as calculated by Platts, part of S&P Global Commodity Insights. Notably, NEVs represented approximately 54% of domestic vehicle sales, outpacing conventional fuel vehicle sales, as highlighted by CAAM.

The urgency among consumers has intensified since September, largely driven by the impending expiration of the NEV purchase tax exemption at the end of this year. The anticipated reinstatement of a 5% tax next year has further amplified this sentiment, contributing to sustained momentum in the auto market, according to the China Passenger Car Association (CPCA).

This year's trade-in policy was deliberately timed to be front-loaded, so overall sales growth in October might be relatively more moderate, CPCA said.

China's NEV output and sales totaled 11.24 million and 11.23 million units, respectively in the first nine months of this year, up 35.2% and 34.9% than in the same period last year.

Meanwhile, China's NEV exports reached 222,000 units in September, down 0.9% month over month but more than doubling from a year ago, according to CAAM data.

The exports remained above 200,000 units for the sixth straight month, CAAM data showed.

CAAM considers pure and hybrid electric vehicles as new energy vehicles.

Power battery output

China's output of power batteries and other batteries, a key indicator of battery metals consumption, totaled 151.2 GWh in September, up 8.3% from a month ago and 35.4% from a year earlier, according to data from the China Automobile Battery Innovation Alliance, or CABIA.

Meanwhile, sales of power batteries and other batteries rose to 146.5 GWh in September, up 9% month on month and 42.2% higher year over year, CABIA data showed.

The nickel-cobalt-manganese materials used by power battery and other batteries totaled 63,000 mt in September, up 1.6% from a month ago, CABIA data showed. Lithium iron phosphate materials consumption reached 299,000 mt during the same period, up 9.9% month on month.

Lithium chemicals prices

Chinese domestic lithium carbonate spot prices were in a volatile downtrend following the week-long holiday Oct. 1-8.

Platts, part of S&P Global Commodity Insights, assessed battery-grade lithium carbonate at Yuan 72,500/mt ($10,176/mt) Oct. 14 on a DDP China basis, up Yuan 200/mt day over day and Yuan 500/mt from a month ago.

"Both supply and demand for domestic lithium carbonate remain robust, so it's really a toss-up where the price will go," said a Chinese trader.

Lithium carbonate production in October is expected to maintain the potential for further growth, several market participants said.

Golmud Zangge Potash, the wholly owned subsidiary of Zangge Mining, has resumed production of its lithium carbonate unit located in Haixi Prefecture, Qinghai province, starting Oct. 11 after a closure of about three months, according to a statement released by the company Oct. 14.

Meanwhile, demand from the EV and energy storage industries would keep the market in an inventory drawdown phase in the near term, some sources said.