China August NEV output, sales at fresh highs

China's new energy vehicle (NEV) production and sales hit fresh highs again in August amid China's accelerating transformation to a low-carbon emission society.

The country produced 309,000 NEVs in August, up by 180.6pc from a year earlier and by 8.8pc from July, with sales up by 181.9pc over the same period and by 18.6pc from July to 321,000, exceeding 300,000 units for both monthly output and sales for the first time, according to data from the China Automotive Manufacturers Association (CAAM).

Total output reached 1.813mn during January-August, up by 192.8pc on the year, with sales moving up by 194pc to 1.799mn units.

China has been accelerating development of NEVs to achieve its carbon emissions peak by 2030 and carbon-neutral targets by 2060. Beijing has extended government subsidies on NEVs for two years to the end of 2022 and exempted the purchase tax on NEVs for 2021-22. NEV sales accounted for 17.8pc of total auto sales in August in the domestic market. Beijing aims for NEV sales to account for 20pc of the country's total vehicle sales in 2025, with current rapid growth in the market likely to help it achieve this target in the next two years.

Buoyant demand from the NEV sector has bolstered lithium and cobalt feedstock prices. Argus yesterday assessed prices for 99.5pc grade lithium carbonate and 56.5pc grade hydroxide, which areessential raw materials in production of lithium-ion batteries used in electric vehicles, higher at 138,000-145,000 yuan/t ($21,231-22,308/t) ex-works and Yn138,000-144,000/t ex-works respectively, a three-year high. Cobalt sulphate, one of the key battery ingredients, was assessed at Yn77,000-80,000/t ex-works yesterday, having risen by 38.9pc since the start of 2021.