China’s production and sales of new energy vehicle (NEV) continued to surge in August, hitting new all-time highs while output of conventionally powered vehicles slid again for yet another month.
(And continue to put life into global prices for lithium, aluminium, copper, nickel and cobalt.)
Data from China’s auto industry body revealed that the country produced 309,000 NEVs in August, up 180.6% from a year earlier and just on 9% from July. Sales were up by 182% from 2020 and by 18.6% from July to 321,000.
It was the first time that monthly production and sales topped the 300,000-unit level, according to China Automotive Manufacturers Association (CAAM).
But the surge in NEVs couldn’t offset a slide in total sales for the month as China’s auto sales fell 17.8% in August from the corresponding month a year earlier to 1.8 million.
For the first eight months of the year, China’s vehicle sales jumped 13.7% as the market recovered from pandemic lows.
That’s a slowdown because sales for the five months to May this year were up 39% from the same period of 2020.
The culprit is the continuing shortage of computer chips, plus a shortage of other auto parts in the month caused by the disruptions from Covid Delta outbreaks.
CAAM now expects 2021 growth to be slower than a previously forecast 6.5% as a result of that shortage.
A prolonged global chip shortage has unsettled major automakers including Toyota, Ford Motor, Honda Motor, General Motors and Volkswagen, forcing them and other makers to idle or curtail production.
The shortage was unlikely to be resolved soon as the pandemic rages on in many parts of the world, especially across southeast Asia where many parts and chip producers are located.
In fact the shortage saw Toyota on Friday trim its global production target for the year to March 31, 2022 by 3% or 300,000 units to 9 million. That was after the company was forced to close factories across Asia to cut output by 340,000 vehicles.
No such slowdown for China’s NEVs sector where the chips shortage doesn’t seem to be having an impact. Figures for the January-August period show with, total output reaching 1.813 million, up 193% on the year, with sales jumping 194% to 1.799 million.
The size of the annual rises has more to do with the low base for the comparison with 2020 because of the impact of the lockdowns for much of the first half of that year.
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 made up 17.8% of total auto sales in August in the domestic market, well on the way to the 20% target of total annual sales the Chinese government wants by 2025.
Tesla, the US producer, turned out more than 44,000 vehicles from its new Shanghai factory, most of which were exported.