China needs overseas markets to make up for brutal price wars at home. The higher EU tariffs won't stop the flow but they will sting. "EU tariffs will hurt China’s EV industry because these exports help cover losses from China's domestic price war."
...yes, like I said before, Chinese EV makers sell their EVs in their domestic market for a very low margin and sell the same model in export markets at much higher price to earn the margin they need...in this way, they can produce large number of vehicles to reduce their cost per vehicle and keep employment going.
...now with Chinese EV sales hampered by EU tariffs, that would hurt their margins and reduce their capacity to sustain offering low priced models in their domestic market.
...Net Effect= lower Chinese EV sales in EU + lower China EV sales = lower EV sales globally = lower demand for lithium = lower pressure for spot prices to rise, more likely greater probability for spot prices to fall in 2H 2024 and 2025.
...Add a Recession, and the SC spot price could well dip below $900/T and condemn more lithium projects under development in Western markets (which depend on free market financing), except those in South America and Africa state sponsored mines, because they are viewed as country export foreign exchange earners and the companies there would be supported by the big Chinese EV battery makers i.e CATL and BYD.
