Musk praises China, rejects India! new energy vehicles usher in a sales improvement cycle.
On May 30, Tesla CEO Elon Musk praised China on Twitter on a foreign social media platform, saying: “It seems that few people realize that China is leading the world in renewable energy power generation and electric vehicles, no matter how you look at China, it’s a fact.”
Tesla gigafactory in Shanghai
According to Tesla’s official website on May 3, the Tesla factory in Shanghai will produce 484,000 vehicles in 2021, accounting for 51.7% of Tesla’s total deliveries last year, and its output is 20% higher than the Fremont factory.
Musk previously said that Tesla’s Shanghai Gigafactory has returned to a “very high level” of production capacity and is expected to produce 1.5 million vehicles this year, an increase of more than 50% from 2021 production.
Just as Musk praised China, Musk once again rejected India. When recently asked about Tesla’s plans in India, Musk said on Twitter that Tesla will not build a car manufacturing plant anywhere in the country until it has market access and is allowed to sell cars.
Tesla has long wanted the Indian government to lower taxes to test the market by selling imported cars before it commits to building a factory in India. But Prime Minister Narendra Modi’s government has encouraged Tesla to build cars locally and has asked the company to refrain from selling cars made at its Shanghai plant in India. The recent real support for auto sales expectations may be due to the following three reasons:
Goldman sachs’ point
Lithium battery raw material prices begin to decline, Goldman Sachs: The battery metal bull market is temporarily over
Goldman Sachs pointed out in a recent research report that the frenzy of investors has led to the current oversupply situation, the prices of key raw materials will fall sharply, and the bull market in battery metals will temporarily end.
Goldman Sachs expects lithium prices to fall from just under $54,000/ton this year to just over $16,000 in 2023, while cobalt could fall from $80,000 today to $59,500/ton. Nickel prices are likely to rise by nearly 20% to $36,500/t before the end of the year, but then move lower due to “fundamental pressures”.
In the first quarter of this year, the prices of upstream raw materials for electric vehicles, including lithium carbonate, continued to skyrocket, with battery-grade lithium carbonate skyrocketing to an epic high price Affected by the rising cost of raw materials, many car companies are struggling, and some car companies have stopped production of star-selling models that sold well in the past because of selling one.
However, when the time entered April, the prices of raw materials for electric vehicles such as lithium and cobalt began to fall. At present, the price of battery-grade lithium carbonate has fallen below $70,000/ton. Cobalt has fallen even more, from a peak of more than $70,000/ton to the current $68,000/ton.
For downstream OEMs, the decline in raw material prices is expected to reduce costs and improve profits. However, there are also views that the decline in prices of lithium and cobalt is mainly due to the impact of the epidemic. As the epidemic improves and downstream demand picks up, the prices of lithium and cobalt will remain stable.
Automobile consumption
Policies issued in many places to stimulate automobile consumption
As an important part of the steady growth of automobiles, from the central to local governments, various favorable policies have been introduced recently to stimulate automobile consumption.
The Chinese government recently proposed to relax the restrictions on car purchases, reduce the purchase tax on some passenger cars in stages, issue commercial truck loans, and delay the repayment of principal and interest for half a year through cooperation between banks and enterprises.
The industry believes that the purchase tax reduction and exemption introduced this time is one of the most effective policies to boost car sales.
In addition, the Ministry of Industry and Information Technology stated at the recent conference on boosting the industrial economy that it will organize a new round of new energy vehicles to go to the countryside, launch a number of demonstration cities and demonstration projects for information consumption, and promote the consumption of commodities such as automobiles and home appliances.
Shanghai, which has just introduced 50 plans to revive the economy, proposed that those who buy pure electric vehicles will be given financial subsidies for each vehicle. This policy can boost the sales of 150,000 passenger vehicles.
Among them, the new car purchase directly promotes the new sales of fuel vehicles by 40,000 units. Combined with the reduction of purchase tax and subsidies for replacing electric vehicles, it is expected to drive the sales of more than 100,000 units.
Another first-tier city, Shenzhen, has previously introduced a package of plans to support consumers in purchasing new energy vehicles, increase the supply of incremental car quotas, carry out cars to the countryside, and expand exports of new energy vehicles.
In addition, other provinces and cities have also introduced relevant policies to stimulate automobile consumption, and it is expected that more provinces and cities will follow suit in the future.
Mass launch of new models
Mass launch of popular new models to further stimulate consumer demand
With the gradual improvement of the epidemic situation, many popular models that had been postponed and had high expectations are being released and listed in batches.
At present, the penetration rate of electric vehicles in China has reached more than 20%, and the penetration rate in the world is even lower. If most cars in the future are powered by electric vehicles, the entire market will have room for 3-4 times growth in the next 10 years.
The new energy industry chain has passed the “U”-shaped bottom and entered the “V”-shaped improvement cycle. Shanghai announced that it will cancel the whitelist system for enterprises to resume work and production from June 1, and the production of the industrial chain will usher in a great improvement.
Tesla, the benchmark company, produced 1,000 vehicles per week last week, and is expected to recover to 16,000 vehicles per week in the near future. While increasing the domestic delivery volume, nearly 9,000 vehicles have also been exported.
Based on this, it can be judged that the U-shaped bottom of the new energy vehicle industry in April and May has passed, and the industry as a whole will enter a stage of continuous improvement.
At the same time, the oil vehicle replacement market has a huge stock, and policy incentives open up new energy demand space! In the early stage, the market’s judgment on the demand and penetration of new energy vehicles was only based on the annual new sales of automobiles, ignoring the difference between real demand and sales.
In the future, stock replacement will become an increase in the electric vehicle market that cannot be ignored. Recently, various regions have introduced subsidy policies for the replacement of new energy vehicles (old-for-new), and the stimulus targets are not exactly the same as those of new car consumers, which is expected to open up a huge space for the replacement of new energy vehicles.
The global automotive electrification trend is clear, and overseas lithium battery manufacturers are accelerating their deployment. The high-quality models of mainstream car companies have been continuously launched to improve the industry’s prosperity, and the industry’s upward trend is clear.
The U.S. policy environment has picked up, and it is expected to return to high growth. Tesla continues to lead the global electrification trend. The global new energy vehicle industry chain has entered a stage of rapid growth.
