Category: Industry News

China Electric eMobility eV Industry News Lithium Lithium Carbonate Lithium Prices Research Note

Analysts explain how falling lithium carbonate prices affect EV costs

Post author By Phate Zhang/CnEVPost
Post date March 30, 2023

For an EV with a 70-kWh pack, the cost of the battery is now RMB 12,300 - RMB 14,500 lower than when lithium carbonate prices were at their previous high, analysts say.

Analysts explain how falling lithium carbonate prices affect EV costs-CnEVPost

Falling lithium carbonate prices are known to benefit the profitability of electric vehicle (EV) makers. So how will this price change affect the cost of EVs? A new research note provides a good analysis.

An EV powered by a lithium iron phosphate (LFP) battery typically uses 30-40 kilograms of lithium carbonate, while an EV with a ternary lithium battery consumes 50-70 kilograms of the material, said Haitong International Securities analyst Yang Bin's team in a research note today.

When the price of lithium carbonate drops by RMB 100,000 ($14,540) per ton, the cost of ternary lithium batteries and LFP batteries will see marginal decreases of RMB 60 to RMB 70 per kWh, respectively, the team's calculations show.

In this case, the battery cost would be RMB 4,200 to RMB 4,900 lower for an all-electric vehicle with a 70-kWh battery capacity.

This means that the current battery cost of an all-electric vehicle with a 70-kWh battery capacity is already RMB 12,300 - RMB 14,500 lower than when lithium carbonate prices were at their previous high, the team said.

As a backdrop, lithium carbonate prices have never seen a single day of gains in China this year and continue to fall by several thousand RMB today, according to data from Mysteel.

The average price of battery-grade lithium carbonate per ton in China fell by RMB 7,500 to RMB 256,500 today, down about 57 percent from RMB 590,000,000 last November. The average price of industrial grade lithium carbonate per ton also fell by RMB 7,500 to RMB 210,000 today.

Falling battery costs will drive down the overall cost of EVs, which will allow automakers to see their gross margins repair, according to Haitong's research note.

However, the team also noted that in the long run, automakers need to achieve technology upgrades, reduce costs and improve competitiveness in order to capture sufficient market share and profitability, considering EV penetration is already high in China.

With lower lithium carbonate prices, EV makers will have more room for pricing as they gain greater profit margins, the team said, adding that this is expected to allow them to gain greater market share by cutting prices.

Although the price of lithium carbonate has fallen by more than half from its high a few months ago, the team believes there is still room to fall.

In 2022, China's lithium resource supply was 727,000 tons and demand was 796,000 tons, the team said.

In 2023, China's lithium resource supply is expected to reach 1.088 million tons and demand is expected to be 1.034 million tons, according to the team.

With the supply of lithium resources outstripping demand, there is still room for lithium carbonate prices to fall, with the price of battery grade lithium carbonate expected to fall to around RMB 200,000 per ton by the end of 2023, the team said.

($1 = RMB 6.8772)

Panic selling of lithium carbonate just won't stop

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China China Auto Market Electric eMobility eV Industry News Policy price war

China to allow extended sales periods for ICE models based on existing emissions standard, report says

Post author By Phate Zhang/CnEVPost
Post date March 30, 2023

Price war has been the most talked about topic in China's auto industry this month, and the imminent implementation of a new emissions standard is seen as a major factor.

(Image credit: CnEVPost)

The imminent implementation of a new emissions standard in three months is seen as a major factor behind the price war launched by internal combustion engine (ICE) automakers this month. Now, these automakers may be able to get some respite.

China's policy on extending the sales period for vehicles built to the 6a emissions standard may be announced soon, National Business Daily reported today, citing Shen Jinjun, president of the China Auto Dealers Association (CADA), as saying at a forum.

A government document on the switch to the China 6b standard and the extension of the sales period for 6a-compliant models will be released soon, Shen said, without revealing any more information.

China released the final rule for stage 6 light vehicle emission limits and measurement methods (China 6 standard) in December 2016, a new standard that combines best practices from European and US regulatory requirements.

The standard is being implemented in two phases, with the 6a standard already taking effect on July 1, 2020, and the 6b standard coming into effect on July 1, 2023.

During this month, price war has been the most talked about topic in the Chinese auto industry, and the upcoming entry into force of the 6b standard is seen as an important factor.

There are still some older models on the market that do not meet China 6b emissions regulations, and the de-stocking of these models could have an impact on production, sales and prices in the auto industry, a team from CITIC Securities said in a March 13 research note.

In early March, authorities in Hubei province joined forces with many local car companies to offer subsidies to consumers for car purchases, with some models being subsidized by as much as 90,000 yuan ($13,060). This was seen as the beginning of the massive outbreak of the price war.

Subsequently, several brands, including Volkswagen and BMW, announced similar large discounts. At the same time, some car companies made it clear that they would not participate in the price war, trying to dispel the wait-and-see sentiment of potential consumers.

The price war has had an unprecedented impact on China's auto industry, and on March 22, the China Association of Automobile Manufacturers (CAAM) called on all parties to return to rationality and bring order to the market.

On March 23, China's Auto Dealers Chamber of Commerce (CADCC) called on regulators to delay the implementation of the China 6b emissions standard.

Since the beginning of the year, the CADCC has received feedback from many auto dealer groups that they are under significant pressure to survive because of the impending full implementation of the China 6b emissions standard.

A study covering nearly 100 auto dealer groups showed that nearly 98.89 percent of them strongly recommended that China delay the implementation of the China 6b emissions standard until January 1, 2024, according to the CADCC.

These dealer groups suggest that regulators allow sufficient switchover time for car companies and dealers to deal with the existing inventory of vehicles that do not meet the China 6b emissions standard.

($1 = RMB 6.8906)

China's transition to new emission standard: How will this affect auto market?

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China Electric eMobility eV Industry News Product Launch Saic-gm-wuling Tesla Wuling Binguo

SAIC-GM-Wuling launches new EV model, price from $8,680

Post author By Lei Kang/CnEVPost
Post date March 30, 2023

In the January-February period, SAIC-GM-Wuling sold 50,433 NEVs in China, second only to BYD and Tesla.

(Image credit: Wuling)

SAIC-GM-Wuling, which has had success in the mini electric vehicle (EV) market, is offering another new model to Chinese consumers.

Wuling yesterday officially launched the new EV model Binguo in China, offering five versions with starting prices of RMB 59,800 ($8,683) to RMB 83,800.

The car is an A0-class EV with a length, width and height of 3,950 mm, 1,708, mm and 1,580 mm, respectively, and a wheelbase of 2,560 mm.

For comparison, Wuling's current hot-selling Hongguang Mini EV has a length, width and height of 2,920 mm, 1,493 mm and 1,621 mm, with a wheelbase of 1,940 mm. The Mini EV has a starting price of RMB 32,800.

The Wuling Binguo is available in two powertrain versions, with a permanent magnet synchronous motor as standard and a maximum power of 30 kW and 50 kW respectively.

The vehicle is equipped with lithium iron phosphate battery packs with capacities of 17.9 kWh and 31.9 kWh, respectively, and has a CLTC range of 203 km and 333 km, respectively.

The 333 km range model supports fast charging, taking 35 minutes to charge from 30 percent to 80 percent.

With slow charging, the car can be charged from 20 percent to 100 percent in 5.5 hours.

It is worth noting that although the model was officially launched yesterday, it has been available for pre-order since March 2 and more than 2,700 units have already been delivered.

SAIC-GM-Wuling is a joint venture between SAIC Group, General Motors and Liuzhou Wuling Motors, headquartered in Liuzhou, Guangxi Zhuang Autonomous Region, southwest China.

It sells vehicles based on the GSEV (Global Small Electric Vehicle) architecture in China, including the Mini EV, KiWi EV, Nano EV and Air EV. In addition to these pure electric models, SAIC-GM-Wuling also sells fuel-powered SUVs, MPVs and vans.

In January-February, SAIC-GM-Wuling sold 50,433 new energy vehicles (NEVs) in China, down 15.3 percent year-on-year, according to the China Passenger Car Association (CPCA).

But the automaker was third in China in NEV sales in the first two months, with a 6.5 percent share, behind BYD's 40.8 percent and Tesla's 7.8 percent.

($1 = RMB 6.8871)

Wuling's new mini car Air EV officially launched in China

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Tags BYD, Tesla

China Electric eMobility eV Industry News Product Launch Saic-gm-wuling Tesla Wuling Binguo

SAIC-GM-Wuling launches new EV model, price from $8,680

Post author By Lei Kang/CnEVPost
Post date March 30, 2023