Weekly Report on New Energy Vehicles

The China Association of Automobile Manufacturers (CAAM) has proposed that automotive companies cease the external publication of weekly sales rankings to avoid fragmented information that may lead to misinterpretation.

As of March 21, the prices for battery-grade lithium carbonate range from 73,400 to 75,200 yuan per ton, with an average price of 74,300 yuan per ton, reflecting a decrease of 150 yuan per ton compared to the previous working day. Industrial-grade lithium carbonate is priced between 71,850 and 72,850 yuan per ton, with an average of 72,350 yuan per ton, also down by 150 yuan per ton from the last working day. The ongoing sentiment regarding demand may not meet expectations, resulting in a continued downward trend in the spot trading price of lithium carbonate. Although the supply side shows a weekly reduction in lithium carbonate, the overall output remains high, making it difficult to change the significant oversupply situation. Even though upstream lithium salt manufacturers maintain a strong pricing stance, high inventory levels among traders affect transactions and contribute to the decline in lithium carbonate spot prices. This pattern of accumulating inventory suggests that the downward price trend will persist, accompanied by fluctuations within a range.

According to research from Zhongtai Securities, there is a strong consensus on the seasonal slowdown in the industry during the first quarter. The short-term vehicle trade-in policy is expected to provide a boost. While the annual outlook indicates that policy support will ensure automotive growth, the expectations for the first quarter of 2024 differ from the previous year’s pessimism. Observations of industry performance and various major automotive stocks suggest a significant chance of a subsequent rebound in orders. Therefore, it is advised to maintain focus on investment opportunities in the automotive sector for 2025.

Annual investment directions include: 1) Complete Vehicles: The anticipated growth in market share for strong domestic brands ranges from 8% to 14%. The logic of domestic brands replacing joint ventures continues to evolve, with 8 to 10 strong domestic automakers expected to have substantial opportunities throughout the year. 2) Robotics: The high degree of technological synergy between vehicles and robotics suggests that 60% to 70% of mainstream listed automotive parts manufacturers will likely venture into robotics. The robotics sector is expected to benefit from a combination of domestic and international policy support, major corporate cooperation, and accelerated industrial development, driving the next wave of transformations in the automotive supply chain.

Guotai Junan Securities has indicated that, compared to the 2024 policies, the scope of subsidies for commercial vehicle operational trucks will be expanded to include National IV vehicles. The differentiated subsidy standards will be implemented based on the type of scrapped vehicles, the timing of scrapping, and the type of new vehicles purchased. For heavy trucks, subsidies will be provided based on the early scrapping time of heavy-duty trucks ranging from 12,000 to 45,000 yuan per vehicle, depending on the years of early scrapping. New eligible National VI operational heavy trucks will receive varying subsidies based on axles, while new energy heavy operational trucks will be subsidized at rates ranging from 70,000 to 95,000 yuan per vehicle. The upper limit for scrapping heavy trucks and purchasing new ones will be set at 110,000 to 140,000 yuan per vehicle, maintaining the same level of subsidy intensity as in 2024 but expanding beyond just diesel trucks to include natural gas vehicles. According to data from Truck Home, the National IV heavy truck ownership is expected to be around 800,000, and the expanded subsidy scope is anticipated to stimulate genuine demand and drive an upward trend in domestic heavy truck consumption.

Macro Events

1. Ministry of Commerce: Will launch pilot reforms in automotive circulation to cultivate new growth points in automotive consumption. On March 17, during a press conference held by the State Council Information Office, Li Gang, Director of the Ministry’s Market Operation and Consumption Promotion Department, announced that they would organize pilot reforms in automotive circulation, actively supporting localities to experiment with efficient circulation of used cars and develop the automotive aftermarket, focusing on nurturing new growth points in automotive consumption.
2. Henan Province: Issued “20 Financial Measures” to support multiple livelihood sectors, stimulating consumption. The Henan Provincial Bureau of Financial Supervision, in collaboration with other departments, recently published measures to enhance financial support for various sectors, including automotive and housing. The measures encourage financial institutions to optimize automotive loan services, reduce prepayment penalties, and diversify automotive financial products.
3. Zhejiang Province: Supports vehicle trade-ins with subsidies of up to 15,000 yuan for new energy vehicles and 13,000 yuan for fuel vehicles. On March 17, the Zhejiang Provincial Government issued a plan to significantly boost and expand consumption. It includes support for vehicle trade-ins, with subsidies reaching 15,000 yuan for new energy vehicles and 13,000 yuan for fuel vehicles, and aims to improve automotive loan distribution ratios and optimize financial service processes.

Industry News

1. CAAM’s Initiative: Automotive companies are encouraged to halt external publication of weekly sales rankings to prevent fragmented information leading to misinterpretation. On March 18, CAAM issued a proposal regarding the standardization of data publication, expressing concern over fragmented data releases from some manufacturers that do not represent market trends. This has led to public misinterpretations and disrupted industry order, intensifying unhealthy competition. To maintain a healthy industry ecosystem, CAAM advocates for the standardization of data publication and encourages companies to focus on their operational achievements.
2. March 1-16 Market Retail: 772,000 units sold, a year-on-year increase of 24%. Data from the Passenger Car Association shows that retail sales from March 1-16 reached 772,000 units, up 24% compared to last year and 33% from the previous month. Year-to-date retail sales stand at 3,948,000 units, a 5% increase from last year, with new energy vehicles accounting for 427,000 units sold during the same period, reflecting a 41% year-on-year growth and a 63% increase from last month.

Company News

1. Geely Auto: Revenue surpasses 240 billion yuan for the first time. On March 20, Geely Auto announced its 2024 financial report, revealing total revenue of 240.2 billion yuan, a 34% year-on-year increase, marking a historical high. The net profit attributable to the parent company reached 16.6 billion yuan, up 213%, with a significant improvement in operational profitability.
2. CATL: Enters battery swap cooperation with NIO, investing up to 2.5 billion yuan. On March 18, NIO and CATL signed a strategic cooperation agreement to create the world’s largest and most advanced battery swap service network. This partnership will also involve capital cooperation, with CATL planning an investment of up to 2.5 billion yuan in NIO Energy.
3. Xiaomi Group: Reports 16.7 billion yuan in smart electric vehicle revenue for Q4. On March 18, Xiaomi Group’s report indicated that the revenue for smart electric vehicles and related innovative business segments in Q4 2024 reached 16.7 billion yuan.
4. Xpeng Motors: Reports revenue of 40.87 billion yuan for 2024. On March 18, Xpeng Motors announced a total revenue of 40.87 billion yuan for the 2024 fiscal year, reflecting a 33.2% increase from the previous year.