The electric car market in China fell sharply in April - Energy

The electric car market in China fell sharply last month, affected by the shutdowns caused by the Corona virus pandemic, but it continues to advance on an annual basis.

The decline was prompted by the suspension or slowdown of production by Chinese auto producers in April, as they faced a shortage of auto parts and transportation obstacles due to the closure measures to stem the spread of the pandemic, according to the platform “S&P Global Platts”.

Today, Wednesday, the Chinese Association of Automobile Manufacturers announced that the production of electric cars in China decreased in April by 33% on a monthly basis to 312,000 units, while sales decreased by 38.3% to 299 thousand units.

Electric cars in China

Although the numbers were on a monthly basis, the production and sales of electric cars in April were still sharply higher year on year, reflecting the explosive growth that China’s electric car industry has experienced in recent years.

Electric vehicle production in April was 43.9% higher year on year, while sales rose 44.6%, according to data from the China Association of Automobile Manufacturers.

Chinese electric vehicle sales were also able to expand their market share in the overall auto sector, accounting for 25.4 percent of the country’s total auto sales in April, according to calculations by S&P Global Commodity Insights.

Electric vehicle sales accounted for more than 10% of total vehicle sales for 12 consecutive months.

Electric cars - sales of electric cars

Lithium and batteries

China’s demand for battery metals will continue to face challenges in May, although prices are trending lower, market sources told S&P Global Platts.

Prices of lithium salt in China – a key raw material needed for battery production – have come under pressure recently, due to increased production from salt lakes and weak downstream demand.

Government pressure to keep raw material prices at “reasonable levels” is another factor keeping lithium prices in check.

Battery level lithium carbonate and hydroxide were assessed at 459,000 yuan ($683,000)/metric ton and 460,000 yuan ($68.45 thousand)/metric ton on May 10, down 8% and 8.2%, respectively, compared to the month. The former, according to data from S&P Global.

China’s power battery production reached 29 GWh in April, up 124.1% year on year, but down 26.1% month on month, according to data from the China Automotive Battery Innovation Alliance.

The goal of the auto industry

The China Association of Automobile Manufacturers said that China’s auto industry is expected to reach its full-year target, as domestic producers step up efforts to bring production back to normal.

Shanghai and Changchun, which contribute about 20% of the national auto production, are seeing a positive trend.

The production capacity of auto and auto parts manufacturers in Shanghai and Changchun has increased since resuming operations in mid-April.

However, the sources said it will take some time to achieve a full production level given the scale of the auto industry’s supply chains.

Market sources remained optimistic about China’s total sales of electric cars for this year, despite carmakers raising car prices and the effects of the resurgence of the coronavirus.

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