SHANGHAI, Mar 27 (SMM) – China's latest release of 2019 subsidy policy on new energy vehicles (NEVs) prioritised pure electric cars with a higher energy density, but the requirement was less stringent than market expectations. This may affect the demand for high-nickel ternary batteries in the near term.
To qualify for a subsidy, NEVs must have a minimum energy density of 125wh/kg, up from a minimum of 105wh/kg in 2018, according to the new subsidy policy released on Tuesday March 26.
SMM learned that the energy density of ternary batteries produced by domestic top battery mills currently stands at 140-160 wh/kg.
A car company told SMM that the latest policy pursued slower growth in batteries’ energy density as it focused on the safety of batteries. Carmakers are likely to slow their use of high-nickel ternary batteries while balancing costs and safety, SMM learned.
As China also cut the overall subsidies on NEVs by more than 35% form 2018, automakers and upstream raw material producers are set to face heavier cash flow pressure.
SMM expects China’s NEVs output in 2019 to exceed 1.65 million units, compared with 1.22 million last year, as a transitional period of three months to phase out subsidies allows car companies to upgrade products and adjust output.