Media Contact

Ms. Pinchun Chou

Tel: +886-2-8978-6488 ext.669

Ms. Lindsay Hou

Tel: +886-2-8978-6488 ext.667

RSS Subscription
  NAND Flash  
  Consumer Electronics  
  Green Energy  
  Internet of Things  
  Automotive Electronics  
  Innovative Technological Applications  

Press Release

TrendForce Says Electric Vehicles Market Expects Steady Growth, yet the Price of Cobalt Remains a Key Concern for Future Growth

Thursday , 11 / 23 / 2017 [ Analysts: Duff Lu ]

The demand for xEV battery in China sees significant growth in 2017 due to carmakers’ acceleration into electric vehicles production. The global xEV battery demand expects a steady growth from 2 billion units in 2017 to 2.5 billion units in 2018, a Y0Y increase of 24%, says EnergyTrend, a division of TrendForce.

China’s rapidly expanding NEV market has driven the battery makers to mainly focus on xEV batteries although IT products used to be the main market of battery supply. Consequently, the price of cobalt, a key material in battery cells, has been thriving up during the past year. With the cost rising and the government’s subsidy decreasing, China’s new energy vehicle (NEV) market may face potential risks for future growth.

The price of cobalt has gone higher season by season in 2017 due to the surging demand for batteries with the rapid development of NEV, says Duff Lu, research manager of EnergyTrend. Lu does not expect the cobalt price to keep rising in 2018, but it remains a key concern for the supply chain. In long term, battery makers and vehicle manufacturers will seek solutions, e.g. vertical integration, for secured supply to prevent further large fluctuation in price that may impede the development of the industry.

Enhanced energy density promotes the development of NMC battery market

Before 2017, the demand for xEV battery in Chinese market mainly comes from buses with fixed routes and big sizes, for which the energy density is not a top priority. So LFP batteries are mostly used for a balance between cost and battery life.

In contrast, logistics vehicles and passenger vehicles use mostly NMC battery. With supportive policies announced by the Chinese government, the market penetration rate of new energy passenger vehicles is expected to increase significantly in 2018, resulting in the growing demand for NMC battery. Currently, the penetration rate of NMC battery among passenger vehicles has increased from 50% in 2016 to 70% in 2017, indicating its superior market share over LFP battery in the passenger vehicles market.

The unit price of xEV battery will continue to decline as the energy density of battery increases, says Duff Lu. As a result, the better price-performance ratio will further promote the development of NMC battery market.

Penetration of new energy passenger vehicles and logistics vehicles increases, making them key players in the 2018 Chinese market

Considering the convenience of setting up charging stations and maximizing the utilization of vehicles in the early-development stage of China's NEV market, the introduction of NEV began from big buses and then expanded to those of smaller size. Currently, the penetration rate of small-size (6 to 8 m in length) and medium-size (8 to 10 m in length) buses remains 27% while that of big buses (>10 m) is 20%.

In contrast, the development of electric passenger cars still stays in an early stage, with a penetration rate of only about 3%, mainly due to the high battery price and preliminary development of charging facilities. In 2018, with the penetration expected to increase, logistics vehicles and passenger vehicles will be the major driving forces in China's electric vehicle market, while new energy buses tend to have a more stable growth.


To keep updated with our press releases, please follow our social media pages. facebookGoogle+TwitterLinkin

TrendForce Press Center Copyright Notice
TrendForce grants you a limited license to use and/or republish any of the press releases on TrendForce Press Center for any legitimate media purpose (including copy and redistribute the content of press releases in any format and via any outlets), provided that you follow these license terms:

1. Reference TrendForce as the source on your works, or include a hyperlink to the original release on the TrendForce site.
2. Do not modify any press release wording.
3. Do not modify or add hyperlinks, including but not limited to adlinks, within the press release.

If your citations of press releases contain mistakes and/or have information missing, TrendForce may, in its sole discretion, direct you to remove the content distributed via TrendForce from your site at any time and for any reason, and you agree to comply with such request.