China on track for EV boom with record sales in June

The country's EV market is expected to bounce back and bring production to pre-lockdown levels, Rystad Energy says

China-made Tesla Model 3 electric vehicles at Tesla gigafactory in Shanghai. Reuters

Sales of electric vehicles in China hit a record in June with nearly 596,000 EVs sold, surpassing the previous best of 531,000 EVs in December 2021, according to China Association of Automobile Manufacturers (CAAM).

June sales were up almost 133 per cent on an annual basis and more than 33 per cent on the month.

This brings the total EVs sold in the country to 2.51 million units in the first half of the year, close to a 130 per cent year-on-year increase, said Abhishek Murali, senior analyst at Rystad Energy.

“This is a massive jump given the poor performance in April and highlights the ability of the Chinese market to sharply bounce back and bring production to pre-coronavirus-lockdown levels quite quickly,” Mr Murali said.

“China is expected to sell close to 6 million EVs for the year and this bounce back indicates a strong H2 for the country.”

Overall, sales of all passenger vehicles in China reached 2.5 million units in June, up 344.4 per cent on the month and 23.8 per cent on the year, according to CAAM data.

In the EV category, the Tesla Model Y was the best-selling model for the month, with close to 52,000 sales.

“This is, however, to be expected as Tesla’s deliveries within China occur at the end of each quarter while the first two months are prioritised for exports mainly to Europe,” Mr Murali said.

“However, Tesla’s delivery struggles in the second quarter allowed Chinese car maker BYD to take the number one spot in EV sales year-to-date … BYD sold 134,000 EVs in June and [its] H1 deliveries stood at 638,000, already surpassing the total sales of the company in 2021.”

BYD is expected to sell nearly 1.3 million EVs this year. It will make the company only the second car maker after Tesla to cross the 1 million EV sales mark in a year.

Globally, there is a move towards the use of EVs that are charged from the electric grid as more consumers choose transport powered by “clean” energy.

EV shipments are expected to rise almost 35 per cent on an annual basis this year as governments introduce regulations and incentives to help the industry's growth, according to Gartner.

Nearly 6.4 million EV units are expected to be sold this year, 1.6 million more than in 2021, the US research agency said.

Earlier this week, Ganfeng Lithium, the world’s third-largest and China’s largest lithium producer, announced that it will buy Argentina-based Lithea for nearly $962 million.

Lithea owns rights of two lithium salt lakes in Argentina's mineral-rich Salta province, namely Pozuelos lithium salt lake asset and Pastos Grandes lithium salt lake asset.

“The new deal took place when the lithium prices maintained its momentum at the highest level in the history, having grown by 60 per cent since the start of this year,” said Susan Zou, senior analyst at Rystad.

Battery-grade lithium carbonate costs about 480,000 Chinese yuan ($71,290) per tonne in the domestic Chinese market, according to Rystad.

“With recent recovering EV sales … we estimate the lithium carbonate price in China has room to move up further,” said Ms Zou.

Lithium is needed to produce almost all power batteries currently used in EVs as well as consumer electronics.