China’s electric vehicle (EV) sales have declined year-over-year for the second straight month, on the heels of uncharacteristically slow growth this spring, indicating that contractions in cobalt supply may be partly offset by lower-than-anticipated battery demand.
China announced in March that it planned to end a key subsidy for smaller EVs with a driving range below 250 km, and to halve the subsidy for longer-range vehicles. The policy update sparked a burst in new energy vehicle (NEV) spending, as consumers rushed to take advantage of the subsidies before the June 26 deadline. Sales jumped 85% year-over-year in March, according to the China Automobile Association of Manufacturers.
However, the growth slowed in April, and again in May to just 1.8% growth year-over-year. Sales dipped below 2018 levels in July, after the subsidy cuts, and in late September, the Association reported a 15.8% decline year-over-year in August NEV sales.
This trend could impact cobalt demand and pricing. Batteries – particularly in EVs – account for more than half of global cobalt consumption, and China is the biggest player.
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