The china retail sales figures for new electric vehicles came...

The china retail sales figures for new electric vehicles came out on Friday showing yet another record month (we have been breaking new records every month since July). How anyone can talk about "soft" EV sales is beyond me - I suspect they are listening to narratives rather than looking at the data.



Just out of interest I thought I'd use the data in the above chart recreate the Goldman Sachs chart where they focus on year on year growth in absolute terms (to make things look as bleak as possible which is an awesome feat given that China has experienced a 35% CAGR so far this year).

As you can see in the above charts - using the CnEVPost data to reproduce the Goldman Sachs chart produces a near identical result (comparing my chart on the right to the light blue bars, which is EV sales, in the Goldman Sachs chart on the left).

If I now add in the data for October and November and then forecast December by using the same December growth from last year (which was 7%) I get the following updated version of the Goldman Sachs chart (i.e. the chart below now includes Q4 2023 - with the December month being estimated):

Whoops... looks like their red trend line is about to be well and truly violated. I suspect you won't see this chart in their research again - they will need to come up with something else.

To summarise, we are likely to end up with a CAGR of 36% this calendar year. However, last year we experienced a CAGR in China retail sales of around 90%. Golman Sachs are saying "hey look... we have dropped from 90% to 36%... how terrible is that!!!". This is absolutely ridiculous - if anyone thinks that the lithium supply can expand at 36% CAGR they are deluded. Anything above 20% CAGR is an excellent result.

Something else to watch this week is the Guangzhou Lithium Futures. They went limit up on Thursday at 6% and limit up again on Friday at 10% (they increased the limit from 6% to 10% on Friday - they have also implemented a bunch of other rules to limit trading sizes). This is a 16% increase in two days and there was almost no volume traded as sellers were not willing to trade below limit. January 2024 is the first contract on this exchange that needs to be delivered so it will be interesting to see what happens as traders organise for delivery. I have seen reports on twitter than indicate that in preparation for delivery it has been discovered that that 70% of the material is not at an adequate specification. This would mean that people have been selling supply what does not exist. It will be interesting to see how this plays out but it could easily flow over to the spot market if the people on the wrong side of this need to scramble to secure supply.