China’s EV momentum slows as pricier batteries steer drivers to hybrids
Higher lithium prices and the end of incentives are reshaping China’s EV market, with hybrids emerging as a more practical option for many
Rising battery costs and a cooling car market are likely to tilt China’s electric-vehicle race in favour of hybrids this year, as budget-conscious consumers turn away from fully electric models, analysts say.
“A loss of pure electric car sales can be expected this year due to consumers’ cost concerns,” said Tian Maowei, a sales manager at Shanghai-based Yiyou Auto Service. “It will be a short-term hiccup for the country’s EV market because, over the past two years, we have seen more Chinese drivers opt for pure electric cars.”
Electric vehicles encompass both BEVs and plug-in hybrid electric vehicles (PHEVs), while extended-range electric vehicles (EREVs) also fall within the hybrid category, pairing a battery with a small internal combustion engine to generate additional power.
Lithium price pressures alone could add as much as 3,800 yuan (US$550) to the production cost of a midsize BEV, according to a recent UBS report, compared with about 2,000 yuan for a PHEV.