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Weekly Report on the New Energy Vehicle Industry

According to SMM, as of January 17, battery-grade lithium carbonate was priced at RMB 77,000-78,700 per ton, with an average of RMB 77,850 per ton, up RMB 500 from the previous working day. Industrial-grade lithium carbonate was priced at RMB 74,200-75,200 per ton, averaging RMB 74,700 per ton, also up RMB 500. This week, the spot price of lithium carbonate surged by over RMB 2,000 per ton.

Currently, as downstream material factories are still in the procurement and stockpiling phase ahead of the Spring Festival, transactions in the lithium carbonate spot market remain active. Robust inquiry and procurement activities have prompted upstream lithium salt factories and traders to maintain and raise prices. Today, the center of gravity for lithium carbonate spot transaction prices continues to shift upwards. Considering logistics and shipping, this week will be the final time node for procuring lithium carbonate. It is anticipated that spot prices will primarily stabilize next week, with fluctuations within a certain range.

01. Institutional Views

Dongxing Securities believes that with the rising penetration rate of new energy, automotive intelligence has entered a period of accelerated development, and leading enterprises have gradually established dominant advantages in areas such as training data, training facilities, and intelligent driving ecosystems.

Relying on its technological prowess in the ICT field, Huawei's business has continuously expanded into sectors like connectivity and computing, aiming to build an intelligent world where everything is interconnected. It boasts strong competitiveness in software, hardware, chips, terminals, networks, clouds, and other domains. The development of automotive intelligence aligns well with ICT technology in multiple scenarios. After substantial R&D investment in the early stages, Huawei is gradually entering a harvest period in the smart vehicle sector.

Beneficiary entities include Thalys (601127), JAC Motors (600418), BAIC BluePark (600733) under Huawei's Smart Selection mode, and Changan Automobile (000625) under the HI mode.

02. Macro Events

1. Ministry of Commerce: Over 6.8 Million Vehicles Traded In for New Ones Nationwide in 2024

On January 15, at the press conference series on "the effectiveness of high-quality economic development in China" held by the State Council Information Office, Li Gang, Director of the Department of Market Operation and Consumption Promotion of the Ministry of Commerce, announced that the Ministry will successively issue detailed rules for subsidies on new purchases of automobiles, home appliances, home decoration, electric bicycles, mobile phones, and other digital products in 2025. According to preliminary statistics, more than 6.8 million vehicles were traded in for new ones nationwide in 2024, and over 36 million consumers purchased more than 56 million new products in exchange for eight categories of home appliances. There were approximately 60 million home decoration and kitchen and bathroom products subsidized for renewal, more than 1.38 million electric bicycles traded in for new ones, and the sales of related products driven by trade-ins of consumer goods exceeded RMB 1.3 trillion.

2. Beijing Government Work Report: Promoting New Energy Vehicle Consumption and Building Over 1,000 Electric Vehicle Supercharging Stations This Year

The third session of the Sixteenth Beijing Municipal People's Congress opened at the Beijing Conference Center on January 14, with Mayor Yin Yong delivering the government work report. Regarding the key tasks for 2025, the report proposed refreshing commodity consumption, expanding the implementation of the "two news" policy, promoting green and information consumption like new energy vehicles and digital products, strengthening the innovation of time-honored brands, and showcasing them collectively. The report also proposed implementing the "0.1 microgram" action, strengthening structural, engineering, and management emission reduction, promoting the new energization of motor vehicles and non-road mobile machinery, building over 1,000 electric vehicle supercharging stations, continuously carrying out the 100-day special campaign for dust control, and basically eliminating heavily polluted weather.

3. Shanghai: Exploring Pilot Applications for Low-Altitude Flight Scenarios and Accelerating the Construction of the Yangtze River Delta National Hub Node of the National Integrated Computing Power Network

On January 14, the task division plan for the implementation of Shanghai's five-year action plan for in-depth implementation of a people-oriented new urbanization strategy was released. It proposes strengthening cross-regional industrial collaboration, promoting mutual recognition and interconnection of intelligent connected vehicle test licenses and test results, enhancing the coordinated layout of hydrogen energy infrastructure, exploring pilot applications for low-altitude flight scenarios, and accelerating the construction of the Yangtze River Delta National Hub Node of the National Integrated Computing Power Network.

03. Industry News

1. China's Auto Production and Sales Exceeded 31 Million Vehicles in 2024

On January 13, the China Association of Automobile Manufacturers (CAAM) released data indicating that China's auto production and sales reached 31.282 million and 31.436 million vehicles, respectively, in 2024, surpassing 30 million vehicles for the second consecutive year. Meanwhile, CAAM estimates that total auto sales will reach 32.9 million vehicles in 2025, an increase of 4.7% year-on-year. Among them, passenger vehicle sales are expected to reach 28.9 million vehicles, up 4.9% year-on-year; new energy vehicle sales are expected to hit 16 million vehicles, up 24.4% year-on-year; and auto exports are anticipated to reach 6.2 million vehicles, up 5.8% year-on-year.

2. CAAM: Sales of New Energy Vehicles Accounted for 40.9% of Total New Vehicle Sales in 2024

On January 13, data released by the China Association of Automobile Manufacturers (CAAM) revealed that domestic production and sales of new energy vehicles reached 12.888 million and 12.866 million, respectively, in 2024, with year-on-year increases of 34.4% and 35.5%, respectively. Sales of new energy vehicles accounted for 40.9% of total new vehicle sales, an increase of 9.3 percentage points from 2023. Among them, pure electric vehicle sales accounted for 60% of new energy vehicle sales, a decrease of 10.4 percentage points from the previous year; plug-in hybrid vehicle sales accounted for 40% of new energy vehicle sales, an increase of 10.4 percentage points from the previous year.

3. Cui Dongshu of the China Passenger Car Association: National New Energy Passenger Vehicle Market Showed Continuous Monthly Strengthening in 2024

On January 12, Cui Dongshu, Secretary-General of the China Passenger Car Association, posted an article stating that the national new energy passenger vehicle market demonstrated a trend of continuous monthly strengthening in 2024. From January to December 2024, wholesale sales reached 12.23 million vehicles, up 37.8% year-on-year; retail sales reached 10.899 million vehicles, up 40.7% year-on-year. Specifically, the new energy trend was weak from January to February 2024, and the market gradually recovered and grew from March to August. Policy subsidies drove significant month-on-month growth from September to December, continuously breaking monthly historical highs.

04. Company Dynamics

1. smart and Yuanrong Qixing Reach Strategic Cooperation to Deploy Large AI Models for Intelligent Driving

On January 16, Yuanrong Qixing and smart jointly announced a strategic cooperation. The two parties will focus on exploring cutting-edge AI technology and jointly developing an intelligent driving system with more "AI genes" to propel the evolution of intelligent driving vehicles from a mere means of transportation to an "AI intelligent agent." This new intelligent driving system, leveraging a large AI model, employs an end-to-end algorithm model, supports intelligent driving functions from parking space to parking space, and can navigate complex driving scenarios such as roundabouts, acute turns, congested narrow roads, and roads without lane lines.

2. Changan Automobile: Will Enter the European Market in 2025

On January 15, Changan Automobile stated during an institutional survey that the company will achieve the following milestones in overseas markets in 2025: Firstly, the Rayong factory in Southeast Asia will commence production, marking the official entry of Changan's globalization strategy into phase 2.0; secondly, a European brand launch event will be held to officially enter the European market; thirdly, the KD project in the CIS region (such as Kazakhstan, Uzbekistan, etc.) will officially commence production; fourthly, the establishment of a subsidiary in Brazil will be completed for Central and South America; fifthly, the three brands of CHANGAN, DEEPAL, and AVATR will be fully introduced in the Middle East and Africa.

3. Great Wall Motors: Expected Net Profit for 2024 to be RMB 12.4-13 Billion, an Increase of 77%-85% Year-on-Year

On January 14, Great Wall Motors announced that it is projected to achieve a net profit attributable to the owners of the parent company of RMB 12.4-13 billion in 2024, an increase of 76.60%-85.14% year-on-year. The performance growth is primarily due to the company's commitment to high-quality development, realizing growth in overseas sales, and further optimizing the domestic product mix. The main reason for the increase in non-operating profits and losses is the year-on-year rise in government subsidies received.

4. Leap Motor Becomes the Second Profitable New Force, Achieving Its Goal a Year Ahead of Schedule

On January 13, Leap Motor issued a profit forecast stating that it achieved positive net profit in the fourth quarter of 2024, reaching its single-quarter profit goal a year ahead of schedule. In the fourth quarter of 2024, it achieved no less than EUR 30.5 billion, with an increase of no less than 80%. Annual sales as of December 31 were 293,724 vehicles, up 104% from 2023.

05. Secondary Market

Industry Performance

Industry Valuation

New Energy Vehicle Sales

Raw Material Prices

Spot Prices of Lithium Compounds

Cathode Material Prices

Electrolyte Prices

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