China's EV Sales Surge in 2024: Metals Demand Skyrockets Amidst Global Market Shifts

China's EV

Government Incentives and Consumer Demand Drive Unprecedented Growth; 2025 Outlook and Market Impacts

Chinese new energy vehicle (NEV) manufacturers experienced unprecedented sales growth in 2024, driven by robust government incentives and escalating consumer adoption. This surge significantly impacts the metals market, particularly for lithium, nickel, cobalt, and rare earth elements, essential for electric vehicle (EV) batteries and motors.

Record-Breaking Sales Across Major Manufacturers

Company reports indicate widespread sales increases throughout the sector. Notably, state-owned Chery reported the highest annual sales growth, surpassing 10 million units in monthly sales for the first time in December. Xiaomi, a mobile phone manufacturer, successfully expanded into the EV market, selling over 135,000 vehicles in 2024, with a target of 300,000 units in 2025 following the launch of its Xiaomi SU7 model on March 28, 2024.

Government Support and Market Projections

The Chinese government’s strategic support has been pivotal to this growth. Incentives, including subsidies of up to 20,000 yuan ($2,751) for consumers trading in old cars for NEVs and additional local subsidies, have fueled consumer demand. Industry estimates suggest continued government support in 2025, with subsidies ranging from 8-11% of the average NEV price.

China's dominance in the global NEV market remains unchallenged, holding a 70% market share from January to November and 76% in October and November. This contrasts sharply with a slowdown in non-Chinese markets due to reduced government support.

Forecasts project China’s NEV sales to reach 13 million units in 2024 and 16 million in 2025. However, the sector faces potential challenges in 2025, including increased geopolitical risks. The rising demand for NEVs directly correlates with increased demand for essential battery metals, indicating that the metals market will see changes based on the success of the NEV market.