Electric vehicle sales hit new record in Q2
Despite supply shortages and high prices, many consumers are flocking to EVs.
Published July 14, 2022
The number of battery-electric vehicles sold in the U.S. set a new record in the second quarter of this year, according to data released Wednesday by Cox Automotive, a global company that owns Autotrader and Kelley Blue Book among other brands. Sales rose more than 66% over the same period last year to 196,788 vehicles. For the first half of 2022, buyers snapped up 370,726 EVs.
The market share for pure electric vehicles reached 5.6% in the second quarter, more than double the 2.7% they accounted for in the second quarter of 2021.
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“The market share for pure electric vehicles reached 5.6% in the second quarter”… 94.4% of vehicles sold in Q2 2022 were not battery-electric vehicles. However, the total US sales of all BEV makes and models has finally caught up to US sales of Ford F-series pickup trucks:
Technically, I should subtract 1,837 units from the Q2 2022 Ford F-Series total to account for Ford Lightning sales. Although 98.8% of Q2 2022 F-Series sales were still internal combustion engine (ICE) models.
The cost of catching the F-Series?
We keep hearing claims that battery prices are plunging. This is interesting because the Federal Reserve Bank of St. Louis seems to paint a different picture:
The 66% increase in sales of battery-electric vehicles appears to be accompanied by a fairly sharp increase in the battery manufacturing producer price index. Could it be that the raw materials for batteries are becoming more expensive as demand for batteries increases?
Events, Trends, and Issues: Excluding U.S. production, worldwide lithium production in 2021 increased by 21% to approximately 100,000 tons from 82,500 tons in 2020 in response to strong demand from the lithium-ion battery market and increased prices of lithium. Global consumption of lithium in 2021 was estimated to be 93,000 tons, a 33% increase from 70,000 tons in 2020.
Spot lithium carbonate prices in China (cost, insurance, and freight [c.i.f.] North Asia) increased from approximately $7,000 per ton in January to about $26,200 per ton in November. For fixed contracts, the annual average U.S. lithium carbonate price was $17,000 per ton in 2021, more than double that in 2020. Spot lithium hydroxide prices in China (c.i.f. North Asia) increased from approximately $9,000 per ton in January to about $27,400 per ton in November. Spot spodumene (6% lithium oxide) prices in China (c.i.f. China) increased from approximately $450 per ton in January to about $2,300 per ton in November. Spot lithium metal (99.9% lithium) prices in China increased from approximately $77,000 per ton in January to about $97,000 per ton in July.USGS
According to Trading Economics, lithium carbonate prices have increased more than 400% over the past year.
Lithium carbonate prices in China moved sideways at the 475,500 yuan/tonne level in the first half of July, remaining near the record-high of 500,000 from March and 430% higher year-on-year as demand continued to increase. Data from the Shanghai Metals Market showed that demand for battery grade lithium carbonate increased during July as downstream battery factories and auto manufacturers increased their operating rates. At the same time, battery producers reported lower inventory readings as raw material purchases were not able to keep up with battery output. The higher output followed the rewarding of cash subsidies by local Chinese governments including Beijing, Shanghai, and Wuhan, for customers replacing petrol cars with new EV purchases. The measures were placed to revamp activity in the sector after demand for durable goods plummeted during the strict Covid lockdowns, in addition to contributing to China’s goal of cutting carbon emissions.Trading Economics
But, but, but… Still becoming more economic than oil!
Maybe not… While crude oil prices are far more volatile than the battery manufacturing producer price index…
Crude oil prices have had a flat linear trend for the past 20 years and the ratio of the price indices of crude oil to battery manufacturing actually has a negative trend.
Oddly enough, the battery manufacturing producer price index more or less tracks the global market share of EV sales.