【Fujian: Supports Local Car Consumption-Promoting Activities】On May 28, the General Office of the People's Government of Fujian Province released the “Fujian Province Consumption Boosting Special Action Plan” (hereinafter referred to as the “Plan”). The Plan proposes to intensify the efforts of trade-in programs, to further tap into the potential of consumption and to promote the upgrading of consumer goods. On the basis of the existing policies, it encourages more local advantageous products such as building materials and sanitary fittings to participate in trade-in activities, thus achieving the co-development of “the new” and “the excellent.” The Plan also calls for the combination of people-oriented projects with consumption promotion, expanding the scope of the trade-in program to the service consumption sector according to national deployment requirements, and improving the efficiency of fund utilization to benefit a wider range of consumers. The Plan emphasizes the need to improve the fund utilization and regulatory system, and to accelerate the application, review, and disbursement process.

SMM News on May 29: In the morning of May 29, the automobile and auto parts sectors surged rapidly at the opening bell. The automobile sector index briefly rose by over 2.6% during the session, while the auto parts sector gained more than 2.3%. Among individual stocks, Dongfeng Motor's share price hit the daily limit, with multiple stocks such as King Long United Automotive Industry and Dongfeng Motor New Energy Technology following suit. The auto parts sector witnessed a wave of stocks hitting the daily limit, with over nine stocks, including Chaojie Technology, Yunnan Inner Power, Tongda Electrical, Zhengyu Industry, Hexing Co., Ltd., and Xingmin Intelligent Transportation, sealing the daily limit during the session. On the news front, the Ministry of Industry and Information Technology (MIIT) released its 2025 regulatory development work plan this morning. Projects to be submitted to the ministerial meeting for review this year include the Interim Measures for the Comprehensive Utilisation Management of Scrap Power Batteries from New Energy Vehicles and the Interim Measures for the Total Volume Control and Management of Rare Earth Mining and Smelting and Separation. Projects to be urgently researched and drafted include the Management Measures for the Recycling and Comprehensive Utilisation of Lithium-ion Batteries from E-bikes and the Implementation Rules for the Approval of Domestic Units Leasing Overseas Satellite Resources. Notably, the price war in the new energy vehicle sector has reignited recently. Last Friday, BYD launched a limited-time "fixed-price" sales promotion, mainly targeting users replacing their old vehicles, and increased the replacement subsidy while reducing prices. It is understood that this promotion involves a total of 22 intelligent driving models from the Wangchao and Ocean networks, with a maximum subsidy of up to 53,000 yuan. The promotion period runs from May 23 to June 30. The Ocean network's intelligent driving models start at 55,800 yuan, and the Haishi 07EV 550 Intelligent Navigation Edition's official guidance price of 189,800 yuan has been directly reduced to 149,800 yuan under the "fixed-price" scheme. Following BYD's move to initiate price cuts, multiple automotive brands, including Geely Galaxy, Leap Motor, and Shanghai GM Buick, have also gradually followed suit with price reductions, offering maximum replacement subsidies ranging from 20,000 to 25,000 yuan. Cui Dongshu, Secretary General of the China Passenger Car Association, stated that BYD's recent price cuts on 22 models would have a certain impact on current car market prices. He also mentioned that compared to 41 models in April last year and 19 models in April 2023, the number of models with price reductions in April this year has significantly decreased, reflecting a notable cooling of the "price-cutting trend." However, as automakers strive to achieve their annual sales targets, competition in the car market will intensify further in the second half of the year. He Xiaopeng, Chairman of XPeng Motors, mentioned on the evening of May 28 that the current "price war" is not yet the most intense, and it may become even fiercer in one of the next five years. Regarding XPeng Motors' future, He Xiaopeng stated that XPeng Motors should first not "compete on price" but rather "compete on technology"; second, it should expand globally beyond China; and third, it should transform new quality productive forces towards embodied intelligence. In addition, recently, trade-in policies across various regions in China have been continuously strengthened. Over the past few trading days, several provinces and cities, including Shanghai, Henan, Fujian, and Harbin, have successively issued car purchase incentive policies. In Shanghai, on May 21, the General Office of the Shanghai Municipal People's Government issued the "Shanghai Special Action Plan to Boost Consumption." It mentioned intensifying and expanding the implementation of trade-in for consumer goods. To promote auto consumption, the plan aims to implement the national vehicle scrappage and renewal subsidy policy and Shanghai's vehicle replacement and renewal subsidy policy. It also seeks to implement the national home appliance trade-in subsidy policy, introduce new subsidies for digital products such as mobile phones, tablets, and smartwatches (or smart bands), and further support green home appliances, home furnishings, and home decoration consumption. The General Office of the Henan Provincial Government also recently issued the "Henan Province Special Action Plan to Boost Consumption," which proposed intensifying efforts to promote trade-in. It supports vehicle scrappage and replacement, offering a maximum subsidy of 20,000 yuan for scrapping eligible old passenger cars and purchasing passenger NEVs, and a maximum subsidy of 15,000 yuan for purchasing fuel-powered passenger cars. For transferring old cars and purchasing passenger NEVs, the maximum subsidy is 15,000 yuan, and for fuel-powered passenger cars, it is 13,000 yuan. By 2025, the province aims to complete the scrappage and replacement of approximately 500,000 vehicles and the trade-in of over 8 million home appliances. In Harbin, according to the Harbin Bureau of Commerce, starting from May 28, Harbin will launch the "2025 Harbin Summer Charm Ice City Car Purchase Promotion" campaign. During the event, 48 million yuan in car purchase subsidies will be distributed on a first-come, first-served basis until the funds are exhausted. The subsidies are targeted at individual consumers, with no regional restrictions. Anyone purchasing a new household passenger car (including NEVs) with "China VI" standards and seven seats or fewer from participating merchants can enjoy government subsidy policies in three tiers. For vehicles priced at 150,000 yuan or below (inclusive), a subsidy of 3,000 yuan per car will be provided; for vehicles priced above 150,000 yuan up to 300,000 yuan (inclusive), a subsidy of 4,000 yuan per car will be provided; and for vehicles priced above 300,000 yuan, a subsidy of 5,000 yuan per car will be provided. On May 28, the General Office of the Fujian Provincial Government issued the "Fujian Province Special Action Plan to Boost Consumption," which proposed supporting auto consumption. It aims to promote activities such as car modification, rental, racing, exhibitions, RV camping, and traditional classic car consumption in the automotive aftermarket. It encourages local governments to cultivate and expand used car business entities, promote "reverse invoicing" for used car sales, and accelerate the transition from brokerage to dealership models in the used car market. It also supports local governments in conducting auto consumption promotion activities, stacking car purchase incentive policies for additional support. By the end of 2025, China aims to have built over 80,000 public charging piles in total, achieving full coverage of public charging facilities in every township. The vehicle trade-in subsidy policy has also significantly boosted the automotive market. The China Passenger Car Association (CPCA) has stated that the effects of the "program of large-scale equipment upgrades and consumer goods trade-ins" have continued to emerge this year. From January to April this year, various regions and relevant departments have fully utilized the ultra-long-term special treasury bond funds to promote the continued effectiveness of the policy to expand and strengthen the "program of large-scale equipment upgrades and consumer goods trade-ins". The policy to expand and strengthen the trade-in of consumer goods has yielded remarkable results, with diverse consumption scenarios continuously innovating, driving improved performance in the industries and supply chains of related products. Driven by the vehicle trade-in and replacement subsidy policy, 10.12 million vehicles were produced from January to April 2025, up 11% YoY.

[5.29 Lithium Battery News] ►Fujian: Supports local governments in launching initiatives to boost car consumption, with additional preferential policies for car purchases ►He Xiaopeng of XPeng Motors: The "price war" will intensify in one of the next five years ►The Ministry of Industry and Information Technology (MIIT) releases its 2025 regulatory development work plan ►All battery cells of the Jiyao Tongxing, a battery company under Geely Group, have passed the new national standard battery cell detection ►Canmax: The solid-state battery project is progressing smoothly, with some customers having achieved sales after passing evaluations ►A new-type fuel cell prototype device with three times the energy density has been validated

The second round of coke price cuts has been implemented. The coke procurement prices of large steel mills in Hebei have been reduced, with a decrease of 50 yuan/mt for wet quenched coke and 55 yuan/mt for coke dry quenching. The specific situation after adjustment is as follows: Grade 1 wet quenched coke (A≤12.5, S≤0.7, CSR≥65, MT≤7) is priced at 1,410 yuan/mt; Grade 1 coke dry quenching (A≤12.5, S≤0.7, CSR≥65, MT≤0) is priced at 1,625 yuan/mt. The above prices are tax-inclusive, delivered to the mill and payable upon acceptance, effective from 0:00 on May 28, 2025.

China's automobile market recorded double-digit growth in both production and sales in Q1 2025, marking a strong start to the year.

SMM April 10 News: On April 10, amid the continued rebound in the morning session, the auto parts sector surged rapidly during the day, with the index rising nearly 6% at one point. Although the gains narrowed slightly later, the index still closed up 3.48% for the day. In terms of individual stocks, Junchuang Technology and Shuanglin Co., Ltd. rose more than 10%. Six stocks, including Hailian Jinhui, Lianming Co., Ltd., Guansheng Co., Ltd., Zhenghe Industry, Dema Precision, and Tianqi Mold, hit the daily limit. Xianglou New Materials, Huayuan Co., Ltd., and others rose more than 6%. On the news front, on April 9, Cui Dongshu, Secretary General of the China Passenger Car Association (CPCA), stated that the US tariff increase has provided greater development space for Chinese EVs in overseas markets. He believes that in the past, Chinese cars faced a complex environment in overseas markets, but now the world trade order is showing a multipolar development trend, which has instead created relatively independent development spaces for Chinese cars in various countries. The core of intelligent electrification is electrification, and the core of electrification is the industry chain, where China holds a significant advantage. The CPCA believes that efforts should be made to develop small and micro EVs and plug-in hybrid models to expand the presence of Chinese EVs in overseas markets. Additionally, on April 10, Wang Qing, Deputy Director of the Market Economy Research Institute of the Development Research Center of the State Council, stated that policies will still have a significant boosting effect on auto consumption this year. Wang Qing predicts that this year's subsidy policy will cover approximately 25 million passenger cars, stimulating the potential of lower-tier markets and the central and western regions, and is expected to boost vehicle scrappage and replacement consumption by over 2 million units. Wang Qing judges that there is no significant pre-consumption effect this year, with 500,000 to 1 million units of suppressed new car consumption demand yet to be released. Regarding the NEV market trend, Wang Qing believes that domestic NEV sales are expected to reach 17 million units this year, with a market share approaching 58%. Moreover, the passenger car market performed exceptionally well in March. According to the latest data released by the CPCA, national passenger car retail sales in March totaled 1.94 million units, up 14.4% YoY and 40.2% MoM. Cumulative retail sales since the beginning of the year reached 5.127 million units, up 6% YoY. Cui Dongshu, Secretary General of the CPCA, analyzed that in recent years, domestic car retail sales have shown a trend of starting low and ending high. March retail sales were only slightly below the highest level of 1.98 million units in March 2018, ranking high in historical March retail sales. Driven by the national dual-new policy, the price war has been relatively mild, and the cut-throat competition has improved. The YoY retail growth rate in March this year was the highest in nearly 10 years, reversing the trend of low growth rates in March over the past decade. From the perspective of NEV retail penetration, the penetration rate of NEVs in the overall domestic passenger car market reached 51.1% in March, up 8.7 percentage points YoY. It has been three months since the last time the penetration rate exceeded 50%. Looking ahead to the April car market trend, the CPCA predicts that under the support of multiple favorable factors, the passenger car market is expected to continue its steady growth. Additionally, the CPCA stated that with the national and local policies promoting consumption, the spring auto show offline activities will fully activate the market atmosphere and accelerate the gathering of popularity. The timely holding of the Shanghai Auto Show and the model release activities during the promotion period of the Shanghai Auto Show, combined with the implementation of local consumption promotion policies, will undoubtedly become a catalyst and trigger for boosting domestic auto consumption. Guotai Haitong previously released a research report stating that in terms of total volume, the car market rebounded MoM in March, mainly due to the post-Chinese New Year recovery cycle in February and the successive release of trade-in policies across regions. Structurally, the March sales of BYD, Geely, Leap Motor, and XPeng saw significant YoY growth, benefiting from their strong new car cycles.

Recently, the latest data released by the China Passenger Car Association (CPCA) shows that in March this year, the national passenger car market retail sales totaled 1.94 million units, up 14.4% YoY and 40.2% MoM. Since the beginning of this year, cumulative retail sales reached 5.127 million units, up 6% YoY. Cui Dongshu, Secretary General of the CPCA, pointed out that in recent years, the domestic car market retail sales have shown a trend of low in the first half and high in the second half. In March this year, retail sales were only slightly lower than the highest level of 1.98 million units in March 2018, remaining at a historical high for March. Driven by the national dual-new policy, the price war was relatively mild, and the cut-throat competition in the industry improved. The YoY retail growth rate in March this year was the highest in nearly 10 years, reversing the trend of low growth in March over the past decade. Domestic brands captured 63% of the market share. In March, domestic brands continued to perform well. CPCA data shows that in that month, domestic brand retail sales reached 1.22 million units, up 31% YoY and 33% MoM. Such strong growth momentum highlights the vitality and potential of domestic brands. With this achievement, domestic brands accounted for 62.7% of the domestic retail market, slightly down from February but still up 7.7 percentage points YoY. From January to March, the retail market share of domestic brands also reached 63%, up 7.9 percentage points YoY, further consolidating their dominant position in the market. Mainstream joint venture brands did not continue the trend of both YoY and MoM declines. In that month, their retail sales were 480,000 units, up 45% MoM, but still with a slight YoY decline. The market shares of major factions continued to decline, with German brands accounting for 17%, down 3.6 percentage points YoY; Japanese brands accounting for 12.2%, down 1.5 percentage points YoY; and US brands accounting for 6.8%, down 1.4 percentage points YoY. Focusing on the luxury car segment, retail sales in that month were 250,000 units, down 7% YoY but up 68% MoM. The retail market share was 12.9%, down 3 percentage points YoY. From the comparison of market shares, it is clear that domestic brands remain the absolute main force in the passenger car market, once again demonstrating the success of traditional domestic enterprises in their NEV transformation. The CPCA pointed out that domestic brands have gained significant increments in the NEV and export markets, with leading traditional automakers performing excellently in their transformation and upgrading. Brands such as BYD, Geely, Chery, and Changan have seen significant increases in their market shares. Data shows that in March, the NEV penetration rate among domestic brands in domestic retail sales was as high as 72%, while it was 35% for luxury cars and only 6% for mainstream joint venture brands. From the monthly NEV domestic retail market share, in March, mainstream domestic brands accounted for 71.5%, up 1.3 percentage points YoY; joint venture brands accounted for 2.8%, down 2.3 percentage points YoY; new forces accounted for 17.1%, up 3 percentage points YoY; and Tesla accounted for 7.5%, down 1.2 percentage points YoY. It can be said that the first-mover advantage of domestic brands in the NEV field is gradually transforming into comprehensive market competitiveness. Traditional domestic brands such as BYD, Geely, and Chery have successfully seized market opportunities by rapidly deploying NEV models. At the same time, new force brands are also accelerating their rise, further driving the growth of domestic brands' market share in the NEV field. In contrast, joint venture brands are lagging significantly in the NEV field, with their market shares continuing to decline, reflecting their strategic delays and insufficient technological reserves in the NEV transformation. Although the luxury car market has occupied a certain market share in the past due to brand premium and technological advantages, its NEV penetration rate is low, facing dual impacts from domestic high-end brands and NEV new forces, with increasing market competition pressure. Following this trend, 2025 may become an important year for domestic brands to accelerate the restructuring of the competitive landscape. According to the latest forecast by Gasgoo Automotive Research Institute, the market share of domestic brands is expected to reach 72.5% in 2025, with BYD, Chery, and Geely expected to contribute 1.88 million units of sales increment to the car market in 2025. NEV penetration rate rebounded to 51%. According to CPCA data, in March, the retail sales of passenger NEVs reached 991,000 units, up 38% YoY and 45% MoM. From January to March, cumulative retail sales reached 2.42 million units, up 36.4% YoY. Focusing on the single month, the NEV penetration rate in the overall domestic passenger car retail market in March was 51.1%, up 8.7 percentage points YoY. As is well known in the industry, in July 2024, the domestic retail penetration rate of NEVs exceeded 50% for the first time, and then remained above 50% for five consecutive months. However, in the following three months, due to factors such as the Chinese New Year (the period before and after the Chinese New Year is the peak season for car purchases in county and rural markets, with high demand for new purchases and a higher proportion of internal combustion engine vehicles), the corresponding penetration rate was below 50%. Now, after three months, the domestic retail penetration rate of NEVs has returned to above 50%, undoubtedly demonstrating the resilience of the NEV market. Cui Dongshu stated that the domestic retail penetration rate of NEVs rebounded to 51.1%, showing strong growth against the backdrop of scrappage and renewal, trade-in policies, and NEV purchase tax exemptions. It is reported that as of March 24, the total number of car trade-in applications nationwide exceeded 1.5 million. This data not only reflects consumers' strong demand for NEVs but also reflects the government's policy direction of promoting car consumption upgrading and energy conservation and emission reduction. As more consumers choose trade-ins, the NEV market is expected to see greater development space. Gasgoo also noted that in March, the export volume of passenger NEVs increased both YoY and MoM. This growth trend indicates that the competitiveness of China's NEV industry in the international market is continuously improving. Specifically, in that month, China's passenger NEV exports reached 143,000 units, up 6.4% YoY and 21.2% MoM, accounting for 36.6% of passenger car exports, up 4.9 percentage points YoY. Among them, pure electric vehicles accounted for 62% of NEV exports (83% in the same period last year). Although the proportion has declined, it remains the main force of NEV exports. As the core focus, A00+A0 class pure electric vehicles accounted for 33% of NEV exports (37% in the same period last year). Although the proportion has slightly declined, it still maintains a high level of exports. Focusing on automakers, BYD still performed excellently in passenger NEV exports, with its export volume reaching 67,307 units in that month, showing strong market competitiveness. Following BYD, Chery's passenger NEV export volume was 16,376 units, also performing well. Chery has gradually enhanced its international market visibility and influence by continuously launching NEV models that meet international market demand. In addition, Geely and SAIC Motor also performed prominently in passenger NEV exports. It is worth noting that Tesla China was mostly ranked in the top two previously, but its ranking has declined in the past two months. In March, its passenger NEV export volume was only 4,701 units, a significant gap from previous performance, which may be related to changes in overseas policies, weak demand, and intensified market competition. The car market in April is expected to grow steadily. Looking back at the performance of the passenger car market at the beginning of this year, January experienced a temporary cooling due to multiple factors. However, with the full recovery of social and economic activities after the Chinese New Year holiday, production and sales data rebounded strongly in February, and the market further returned to normal consumption rhythm in March. As Cui Dongshu said, the comprehensive retail performance in February-March was excellent. Behind this, Gasgoo noted that in March, the state arranged 300 billion yuan of ultra-long-term special treasury bonds to support consumer trade-ins, with the main goal of promoting consumption, which undoubtedly provided strong support for the passenger car market. Driven by the state's consumption promotion policies, many provinces and cities have introduced and gradually implemented corresponding consumption promotion policies. Combined with the full launch of offline activities such as auto shows and OEM subsidies, the car market started well in March. Moreover, as the pre-holiday internal combustion engine vehicle consumption wave turned into the post-holiday NEV consumption wave, the NEV penetration rate continued to rise, making NEVs the main driving force for the recovery of the spring passenger car market. Looking ahead to the car market trend in April, combined with CPCA analysis, under the support of multiple favorable factors, the passenger car market is expected to continue its steady growth trend. On the one hand, in terms of the number of working days, April has 22 working days, the same as the same period last year, which is conducive to the steady growth of car market production and sales. On the other hand, the price war in the spring of 2024 led to a severe market downturn in February-March. With the implementation of the 2024 scrappage and renewal policy on April 24, the car market gradually recovered after April last year, and this April still has a certain low base promotion effect. In addition, driven by the state's consumption promotion policies and corresponding policies in many provinces and cities, spring auto show offline activities will fully activate the market atmosphere and accelerate the gathering of popularity. "The timely holding of the Shanghai Auto Show and the model release activities during the promotion period of the Shanghai Auto Show, combined with the implementation of local consumption promotion policies, will undoubtedly become a catalyst and trigger point for promoting domestic car consumption," Cui Dongshu said. In addition, this year's five-day May Day holiday is a good time for driving trips. In recent years, self-driving tours have continued to be popular, and the self-driving experience is better with high-level assisted driving. Recently, new products have enhanced cost performance by adding configurations without increasing prices, which will also drive the demand growth of new purchase and replacement groups. In addition, the CPCA also pointed out that due to drastic changes in the external environment and the unexpected pressure of widespread tariff increases, consumer sentiment has also been affected to some extent. However, the state has long had a policy orientation to promote domestic demand, so the trend of our development being driven by both domestic and external demand is becoming increasingly obvious, and the effect of stabilizing domestic demand in the passenger car market will continue to be reflected. Focusing on the export level, the institution believes that China's car exports to the US account for a negligible proportion, especially since domestic brands are not sold in the US at all, so China's domestic brand cars will not be affected by US tariff increases. Of course, it also pointed out that this round of tariff adjustments may affect the production and construction layout of Chinese brands in some overseas bases in the short term, but Chinese cars in the future globalization strategy have development space. "With the deepening of cooperation in the Belt and Road and global south countries' markets, we need to develop passenger car categories that meet local demand, especially encouraging the local manufacturing and popularization of NEVs, while highlighting China's industrial advantages in internal combustion engine vehicles to achieve energy conservation and emission reduction in the global market."

SMM Cobalt and Lithium Morning Meeting Summary: At the beginning of this week, the spot price of refined cobalt slightly increased. Supply side, smelters generally adopted a stand firm on quotes approach due to the potential extension of DRC's suspension of cobalt product exports. Demand side, some producers had already completed their purchases, resulting in fewer inquiries from downstream producers and lower actual transactions.

The Ministry of Finance released the 2024 Report on the Implementation of China's Fiscal Policy, stating that fiscal policy in 2025 should be more proactive, with sustained and increased efforts. Strengthening scientific fiscal management. Deepening comprehensive reforms in the fiscal and taxation system, researching and formulating opinions on improving the modern budget system, and enhancing the systematic integration and coordinated efficiency of all budget management systems and measures. Promoting zero-based budgeting reform, the construction of a spending standards system, fiscal affordability assessments, and performance management. Implementing a package of debt resolution policies in detail, resolutely curbing new hidden debt, and effectively preventing and defusing local government debt risks. Accelerating the reform and transformation of local government financing platforms, intensifying financial and accounting supervision, and enhancing the effectiveness of fiscal governance.

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