SHANGHAI, Jun 19 (SMM) – New energy vehicle battery producers scaled back their operations in June and are likely to extend the curbs into the third quarter, SMM learned, as demand grew slower with sharply lower subsidies from the government.
Cathode materials producers told SMM that battery producers cut their procurement for June and that the purchase volume is unlikely to recover before the fourth quarter. Leading NEV battery producers, CATL and BYD slashed their production by about a third since June.
Production and sales of NEV across Chinese markets slowed this year, with production growth in May registering its slowest pace since 2018, as the production rush before new subsidy scheme takes effect in late June has already exhausted.
NEV battery producers and automakers ramped up their production in late 2018 and early 2019 as the new subsidy policy was expected to be released earlier this year.
The appeal of NEV was also lowered by reports of NIO and Tesla vehicles spontaneously catching fire.
Sales promotion of diesel or petrol cars was another factor that impacted NEV sales, as sharply cheaper automobiles diverted buyers. Car sellers attempted to clear their inventories before new vehicle emission standards go into effect in some regions from July.