Chinese electric car sales will continue to boom as motorists shrug off price hikes caused by surging lithium battery costs, say analysts

The prices of nearly 30 models sold in China have been raised since January, by between 1.4 and 13.9 per cent, according to Fitch Ratings

But this is unlikely to put off Chinese motorists keen to make the switch to environmentally-friendly cars, analysts said

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A factory for the Xinwangda Electric Vehicle Battery Co, which makes lithium batteries for electric cars, in Nanjing in China’s eastern Jiangsu province. Photo: AFP

Published: 7:46pm, 13 Apr 2022Updated: 7:50pm, 13 Apr 2022

A five-fold surge in lithium prices that has forced green carmakers to lift their prices in the past two months will do little to dim the prospects for electric vehicle (EV) sales in China, analysts said.

The retail prices of nearly 30 models sold in China have been raised since January, by between 1.4 and 13.9 per cent, according to a tally by Fitch Ratings.

Contemporary Amperex (CATL), a lithium-ion battery producer in Fujian province, has raised the price of the batteries that make up nearly half the cost of an electric car to cope with surging materials costs, said sustainability data and research provider Miotech in a report on April 9.

But the resulting rise in EV prices is unlikely to put off Chinese motorists keen to make the switch to environmentally-friendly cars, analysts said.

“Chinese EV deliveries are likely to remain robust over the coming months with strong order backlogs, despite the recent price hikes due to surging battery costs,” Fitch Ratings’ analysts wrote in a report on April 4.

“Fitch maintains a positive view on China’s EV market as demand remains strong. We expect wholesale deliveries to rise by over 50 per cent and market share [of the whole vehicles market] to exceed 20 per cent in 2022.”

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