China’s new energy vehicle sales soar to new heights

China’s new energy vehicle (NEV) sales were 450,000 units in November, up by 121.1% year on year and up 17.3% month on month.

Production of NEVs in China climbed to 457,000 units in November, up by 15.1% month on month and up by 127.8% year on year. The closing months of the year tend to witness strong sales growth.

From January to November, the country’s NEV sales totaled 2.99 million units, up by 166.8% from the same period last year. The total sales for the year will be above three million units, one million units higher than the market originally expected.

NEV sales accounted for around 17.8% of total new vehicle sales in November, while it was only 5% for the whole year in 2020. For plug-in EVs, the sales accounted for 19.5% of new passenger vehicles in November. In the first eleven months of 2021, NEV sales accounted for 12.9% of all new vehicle sales. We expect the NEV sales share of total new vehicle sales to exceed 20% in 2022.

The total volume of NEV production in January-November was 3.023 million units, up by 167.4% from a year earlier.

We have reviewed our supply and demand numbers and forecasts to account for the rapid pace of growth in electric vehicles (EV) and energy storage (ESS) seen this year. In addition, demand will grow at a faster pace than consumption as downstream manufacturers will need to increase the amount of working stock they hold as they increase their production capacity.

EV sales have been spectacular so far this year. In the January to October period, sales have grown by 189% in China, 157% in Europe (Jan-September pro rata) and by 94% in the US. While these numbers are to some extent high due to the sluggish sales in the first two quarters of 2020 due to Covid-19, they are in their own right very high, particularly in China and Europe.

While a bottom-up calculation as to how much lithium will be consumed by the EV/ESS industry, plus by industry in general, provides a number for consumption, apparent demand will be somewhat larger as it needs to take into account how much material will be needed to rebuild inventory, after this year’s supply deficit and to build up working stock.