It is predicted that the growth of China’s electric vehicle market will slow down this year. This is..

It is predicted that the growth of China’s electric vehicle market will slow down this year. This is because lithium prices, the main material for electric vehicle batteries, are rising and the Chinese government’s electric vehicle subsidy policy has ended. The «low-cost export» offensive is also expected to intensify due to the decline in demand in China.

Hong Kong’s South China Morning Post (SCMP) said on the 20th that the Chinese electric vehicle market is changing this year, predicting that many consumers will prefer plug-in hybrids (PHEVs) instead of pure electric vehicles (BEVs) due to rising lithium prices and the end of subsidy policies.

사진 확대

According to a recent report released by UBS, a global investment bank, the production cost of medium-sized BEVs in China is expected to increase by up to 3,800 yuan (about 790,000 won) due to rising lithium prices. On the other hand, PHEV’s expected increase in production costs was only 2,000 yuan (about 410,000 won). In addition, it was analyzed that BEV’s price this year could be up to 20% more expensive than equivalent PHEVs.

The report said, «It is a difficult time for the Chinese electric vehicle industry due to not only re-imposition of car purchase taxes from this year, but also rising raw material prices.»

In fact, lithium prices have doubled in the last three months. According to market research firm Trading Economics, the price of lithium carbonate, which was 80,000 yuan per ton in November last year, soared to 160,500 yuan at the end of last month. In addition, the Chinese government ended the purchase tax exemption policy introduced to encourage the purchase of electric vehicles at the end of last year. As a result, starting this year, consumers will have to pay a 5% purchase tax when purchasing electric vehicles.

«Consumers belonging to the middle class or low-income class will be very sensitive to price,» the SCMP said, citing the opinions of industry officials. «We expect BEV sales to decrease this year due to increased consumer cost burden.»

As demand in China becomes inevitable, there are also concerns that Chinese electric vehicle companies could push their supplies to overseas markets. Although the Chinese government is cracking down on ‘bleeding competition’, it is also supported by the fact that there is a limit to resolving the oversupply structure.

Exports of Chinese cars are expected to reach 7 million this year, up to 15% from the previous year. Considering that exports were about 750,000 units in 2018, it has surged nine times in eight years.

BYD’s performance and stock price, which represent China’s electric vehicles, are also falling. BYD’s stock price fell about 40% from its peak in May last year, and electric vehicle deliveries fell more than 30% year-on-year last month. During the same period, total electric vehicle sales in China also fell by about 20%.

Beijing correspondent Song Kwang-seop