Summary of China Auto/EV/Batteries Global Markets Research Industry Overview - The report focuses on the **China auto market**, particularly the **electric vehicle (EV)** segment and **batteries** industry - The data reflects trends and performance metrics for the **automotive sector** in China, including sales figures and market dynamics Key Points Market Performance - In September 2025, the China auto market recorded: - **Wholesale unit shipments**: 2.9 million (+13.2% year-on-year, +12.5% month-on-month) [1] - **Retail unit shipments**: 2.2 million (+6.4% year-on-year, +11.0% month-on-month) [1] - **EV retail sales**: 1.3 million units (+15.5% year-on-year, +16.1% month-on-month) [1] - **EV penetration** reached a record high of **57.1%** [1][7] Future Expectations - Anticipation of **rush orders and deliveries** in the fourth quarter of 2025 due to the impending **50% cut in EV purchase tax exemption** starting in 2026 [3][7] - Expected **muted demand** in the first quarter of 2026 as the market adjusts post-subsidy [3] Competitive Landscape - Increased competition is expected as traditional **internal combustion engine (ICE)** players maintain significant market share [2] - Notable EV players gaining market share include **Geely** and **Leapmotor** in the mass market, while **NIO**, **Li Auto**, and **Xiaomi** are emerging in the premium segment [2][17][18][22] Battery Market Insights - **EV battery installation** grew by **15% quarter-on-quarter** to **76 GWh** in September 2025, with a total of **194 GWh** installed in Q3 2025 (+36% year-on-year) [5][39] - Lithium carbonate prices decreased from **CNY 80,000/tonne** to **CNY 73,000/tonne** due to increased production and inventory levels [5][48] - Anticipated **high-single-digit percentage growth** in battery production for October 2025, which may support lithium prices in the near term [5][48] Company-Specific Performance - **BYD**: - Retail sales of **347,400 units** in September 2025 (-10.2% year-on-year) with a market share of **26.8%** [16] - Inventory ratio at **1.49**, indicating efforts to clear stock ahead of a strategic shift in 2026 [16] - **Geely**: - Retail sales of **151,000 units** (+68.3% year-on-year) with a market share of **11.6%** [17] - **NIO**: - Retail sales of **34,600 units** (+63.2% year-on-year) with new model launches contributing to improved competitiveness [22] - **Xiaomi**: - Retail sales surged to **36,600 units** (+209% year-on-year) [18] Export and Global Expansion - The China auto industry exported **560,000 units** of passenger vehicles (+22.5% year-on-year) [34] - Companies are expected to focus on **global expansion** to mitigate challenges in the domestic market [4][34] Inventory and Market Dynamics - The **Inventory Alert Index** slightly declined to **54.5%**, indicating a healthy inventory level as the peak season approaches [30] - Stricter standards for NEVs eligible for tax exemptions may necessitate inventory clearance for certain models [9] Conclusion - The China auto market, particularly the EV segment, is experiencing robust growth, driven by increasing penetration and competitive dynamics. However, challenges such as upcoming tax changes and intensified competition necessitate strategic adjustments by market players. The battery market shows promising growth, with expectations of continued demand and price stabilization in the near term.

Investment Rating - The report maintains a "Buy" rating for LG Chem and BYD, while it has a "Sell" rating for POSCO Future M and EcoPro BM [6][31]. Core Insights - The global share of consumers considering buying a Battery Electric Vehicle (BEV) has declined by 5 percentage points year-on-year to 41%, leading to a downward revision of the 2030 global EV penetration forecast by 8 percentage points to 41% [2][10][16]. - The US and EU markets are particularly affected, with expected 2030 EV penetration reduced by approximately 9 percentage points to 24% and 10 percentage points to 38%, respectively, resulting in a significant reduction in global EV battery demand [2][18][27]. - Battery-related issues, particularly range anxiety, have overtaken purchase price as the main consumer concern regarding BEV purchases [2][17]. Summary by Sections Global Electric Vehicle Battery Makers - The Korea EV supply chain is the most negatively impacted by the decline in BEV purchase intentions, especially in ex-China markets [2][16]. - The report highlights that BYD has become a global player, rapidly increasing its exports despite trade barriers, while Tesla has lost its brand image in Europe [2][11]. US Autos, Auto Parts and Auto-tech - The report indicates a significant decline in US consumer interest in BEVs, with purchase intention dropping 5 percentage points to 32% [21][25]. - The potential removal of the $7,500 consumer clean vehicle tax credit and slower rollout of charging infrastructure are key factors contributing to the revised forecasts [21][41]. Lithium Market - The lithium market is currently oversupplied, with spot prices trading into the cost curve, leading to a downward revision of long-term spodumene prices to $1,200 per ton [4][54]. - The report anticipates a 12% reduction in lithium demand forecasts, primarily due to the weaker outlook for EVs [54][55]. Top Picks - The preferred order for the Korea EV supply chain is LG Chem > Samsung SDI > LG Energy Solution > SK Innovation > EcoPro BM > POSCO Future M [6][19]. - BYD is highlighted as the only Chinese OEM with rapidly growing traction in export markets, benefiting from the vacuum left by Tesla [31][32].