Expectations

Despite China's policy of halving purchase taxes on mainstream ICEvehicles, the momentum driving growth in the NEV market is strong, the CPCA said.

The CPCA has raised its forecast for new energy passenger vehicle sales in China by 500,000 units to 6 million units in 2022, with the possibility of further increases in the fourth quarter.

EV makers including Nio, Tesla and GAC Aion have further increased capacity and are expected to see increased production in the second half of the year, the CPCA said.

Li Auto has produced thousands of L9 SUVs, which will be shipped to all its stores in July and deliveries will begin in August.

"The trend is already happening," said Ni Jun, CATL's chief manufacturing officer.

Although some companies in Shanghai and surrounding cities are starting to resume production, it will be difficult to return to normal levels by the end of May, the CPCA said.

Looking at future capacity demand and the company's current capacity profile, it has a capacity gap of no less than 390 GWh by 2025, CATL said.

BYD has bucked the trend of record high sales under heavy pressure, continuing to validate the advantage of having core components supplied by itself, analysts said.

In the first two weeks of April, Chinese passenger vehicle wholesale sales averaged 24,000 units per day, down 44 percent year-on-year and down 48 percent from the average for the first two weeks of March.

The last two years of global battery cathode material industry capacity planning shows that the expansion scale and speed of LFP materials will far exceed that of ternary materials.