This week, LCO market prices remained broadly stable overall. Affected by slight fluctuations in lithium carbonate prices, LCO prices also saw some corresponding adjustments, but the overall range remained limited. Demand side, the impact of chip shortages on the consumer electronics market exceeded previous market expectations. In addition, battery cell manufacturers currently had relatively ample raw material inventory, and their willingness to proactively restock remained weak in the short term, with no clear recovery in procurement pace. At present, market participants generally maintained a wait-and-see stance, and transactions were mainly driven by rigid-demand orders executed according to established plans. In the short term, LCO prices are expected to remain stable overall, and attention should be paid to changes in orders and procurement plans at various companies. Wang Cong 021-51,666,838 Ma Rui 021-51,595,780 Feng Disheng 021-51,666,714 Lv Yanlin 021-20,707,875 Zhou Zhicheng 021-51,666,711 Zhang Haohan 021-51,666,752 Wang Zihan 021-51,666,914 Wang Jie 021-51,595,902 Xu Yang 021-51,666,760 Yang Lianting 021-51,595,835 Wang Zhaoyu 021-51,666,827

In mid-March 2026, CAAM and the China Automotive Power Battery Industry Innovation Alliance successively released relevant data on the auto and power battery markets for February 2026. According to CAAM’s analysis, auto production and sales declined YoY under the combined impact of multiple factors, including policy transition adjustments, front-load demand release, the timing shift of the Chinese New Year holiday, insufficient willingness to consume, and a high base in the same period last year. Among them, the passenger vehicle market and NEV market both declined YoY, while the commercial vehicle market continued to improve, and auto exports grew rapidly. .......SMM compiled the relevant data on the auto market and power battery market for February 2026 for readers’ reference. Automobiles CAAM: February Auto Output and Sales Reached 1.672 Million and 1.805 Million Units, Respectively In February, auto output and sales totaled 1.672 million and 1.805 million units, down 31.7% and 23.1% MoM, and down 20.5% and 15.2% YoY, respectively. From January to February, auto output and sales totaled 4.122 million and 4.152 million units, down 9.5% and 8.8% YoY, respectively. CAAM: February NEV Sales Reached 765,000 Units; January-February NEV Output and Sales Reached 1.71 Million Units In February, NEV output and sales totaled 694,000 and 765,000 units, down 21.8% and 14.2% YoY, respectively. NEV sales accounted for 42.4% of total new vehicle sales. From January to February, NEV output and sales totaled 1.735 million and 1.71 million units, down 8.8% and 6.9% YoY, respectively. NEV sales accounted for 41.2% of total new vehicle sales. CAAM: Auto Exports Continued to Grow in February; NEV Exports up 1.1x YoY In February, NEV exports were 282,000 units, down 6.6% MoM, up 1.1x YoY ; traditional fuel vehicle exports were 391,000 units, up 2.8% MoM and up 26.2% YoY . From January to February, NEV exports were 583,000 units, up 1.1x YoY; traditional fuel vehicle exports were 769,000 units, up 22.2% YoY . Regarding the auto market in February, CAAM said that this year’s Chinese New Year fell in mid-to-late February, and the holiday was extended. As a result, there were only 16 effective working days in February, which had a certain impact on enterprise production and operations, and overall market activity declined. Judging from industry performance from January to February, auto production and sales declined YoY under the combined impact of multiple factors, including policy transition adjustments, front-load demand release, the timing shift of the Chinese New Year holiday, insufficient willingness to consume, and a high base in the same period last year. Among them, the passenger vehicle market and NEVs declined YoY, while the commercial vehicle market continued to improve and auto exports grew rapidly. This year’s government work report explicitly proposed to stimulate the endogenous momentum of household consumption and advance consumption-promoting policies in parallel, continue to amplify the effect of the policy package, further rectify “involution-style” competition, and foster a sound market ecosystem. It is believed that, as detailed local subsidy measures are fully implemented after the holiday, spring auto show sales promotions begin, and automakers roll out new models one after another, this will help boost consumer confidence, energize the auto market, and promote the healthy and stable operation of the industry. Subsequently, the CPCA also released data on the passenger vehicle market for February 2026. From February 1 to 28, retail sales in China’s passenger vehicle market reached 1.034 million units, down 25.4% YoY and down 33.1% MoM. Cumulative retail sales since the beginning of the year totaled 2.578 million units, down 18.9% YoY. As market factors have become more complex, the pattern of “low at the beginning and high at the end” in annual sales has become more evident in recent years. Affected by disruptions such as Chinese New Year, February retail sales have seen wild YoY swings over the years, for example: 2019 (-19%), 2020 (-79%), 2021 (373%), 2022 (5%), 2023 (10%), 2024 (-21%), and 2025 (26%). Therefore, the -25.4% in 2026 was at the lower-middle end of the range of sharp fluctuations in February growth rates over the years. NEVs, retail sales in the passenger NEV market were 464,000 units in February, down 32.0% YoY; from January to February, retail sales in the passenger NEV market were 1.06 million units, down 25.7% YoY. Retail sales of conventional fuel passenger vehicles were 570,000 units in February, down 19% YoY. In February, passenger NEV producer exports were 269,000 units, up 124.7% YoY and down 7.0% MoM; from January to February, passenger NEV producer exports were 559,000 units, up 114.7% YoY, while exports of conventional fuel passenger vehicles were 290,000 units in February, up 21% YoY. NEV exports, as the scale advantages of China’s new energy vehicles become more apparent and market expansion demand grows, more and more China-made new energy brand products are going outside China, and their recognition outside China continues to improve. Among them, PHEVs accounted for 38% of NEV exports (38% in the same period last year). Although they have recently been affected by some disruptions from external countries, exports of independently developed PHEVs to developing countries have grown rapidly, with bright prospects. In February, passenger NEV exports were 269,000 units, up 124.7% YoY and down 7.0% MoM. They accounted for 48.5% of passenger vehicle exports, up 14.8 percentage points YoY; BEVs accounted for 58% of NEV exports (59% in the same period last year), and A00- and A0-class EVs, the core focus, accounted for 55% of BEV exports (56% in the same period last year). The CPCA stated that after the NEV purchase tax exemption policy, which had been implemented since September 2014, was formally phased out at the end of December 2025, the NEV market in 2026 entered a recovery period amid adjustments to tax subsidies. Some consumers brought forward purchases to 2025 to benefit from the policy, resulting in a certain pull-forward effect in January-February this year. This was an expected short-term fluctuation and does not represent the market’s long-term trend. However, with Chinese New Year falling later this year, making it a major consumption year, growth in the auto market diverged, and NEVs did not perform strongly, indicating that more policy support is still needed. Key features of the passenger vehicle market in February 2026: 1. In February, passenger vehicle producers’ daily average exports hit a record high for the month, fully demonstrating the steadily improving competitiveness of China’s automotive industry in the global market and continued robust demand outside China; 2. The retail pullback after the expiration of the vehicle purchase tax exemption was evident, but structural changes were also clear, namely a higher share of high-end NEVs and a lower share of entry-level consumption, which is conducive to the industry’s transition toward high-quality development; 3. New vehicle launches were steady in 2026, and together with the advance of anti-involution efforts curbing disorderly price cuts, NEV sales promotions stayed at 10.4% in February, remaining around 10% for six consecutive months. No vicious volume discount competition emerged, helping maintain market order; 4. The historical pattern of internal combustion engine vehicles outperforming NEVs before Chinese New Year continued again. In February, retail sales in China of internal combustion engine vehicles fell 19% YoY, while pure electric vehicle retail sales fell 35% YoY, range-extended vehicles fell 16% YoY, and PHEVs fell 31% YoY. As time goes by, consumers are expected to gradually adapt to the normalization of NEV taxation, and the NEV market is expected to return to a track of positive growth; 5. This February was still a pre-Chinese New Year consumption phase dominated by internal combustion engine vehicles. NEV penetration rate in retail sales in China was 44.9%, and export penetration rate was 48.5%, which was a relatively good performance; 6. In February 2026, exports of self-owned-brand internal combustion engine passenger vehicles reached 247,000, up 21% YoY, while exports of self-owned-brand NEVs reached 231,000, up 110% YoY. NEVs accounted for 48.4% of self-owned-brand exports. In particular, the high growth of NEV exports in Europe, Southeast Asia, and other regions marked the expanding influence of China’s NEV brands in the international market, laying a solid foundation for future export growth. Power Battery In February, China’s cumulative sales of power and ESS batteries reached 113.2 Gwh, up 25.7% YoY In February, China’s sales of power and ESS batteries reached 113.2 Gwh, down 23.9% MoM, up 25.7% YoY . Of this, power battery sales were 74.5 Gwh, accounting for 65.9% of total sales, down 27.4% MoM and up 11.4% YoY; ESS battery sales were 38.6 Gwh, accounting for 34.1% of total sales, down 16.2% MoM and up 67.3% YoY. From January to February, China’s cumulative sales of power and ESS batteries were 262 Gwh, up 53.8% YoY . Of this, cumulative power battery sales were 177.2 Gwh, accounting for 67.6% of total sales and up 36.5% YoY; cumulative ESS battery sales were 84.8 Gwh, accounting for 32.4% of total sales and up 108.9% YoY. From January to February, cumulative power battery installations were 68.3 Gwh, with LFP installations accounting for 77.9% In February, China’s power battery installations were 26.3 Gwh, down 37.4% MoM and down 24.6% YoY. Of this, ternary battery installations were 5.7 Gwh, accounting for 21.7% of total installations, down 39.1% MoM and down 11.4% YoY; LFP battery installations were 20.6 Gwh, accounting for 78.3% of total installations, down 36.9% MoM and down 27.5% YoY. From January to February, cumulative power battery installations in China were 68.3 Gwh, down 7.2% YoY. Of this, cumulative ternary battery installations were 15.1 Gwh, accounting for 22.1% of total installations and up 0.6% YoY; cumulative LFP battery installations were 53.3 Gwh, accounting for 77.9% of total installations and down 9.2% YoY. More Than 60% of A/H-Share Automakers Achieved YoY Growth, March Auto Market Production and Sales Will See Rapid MoM Growth Earlier, CLS compiled the January-February sales performance of 14 A/H-share listed automakers, of which 9 achieved YoY growth, accounting for more than 60%, and 3 automakers recorded February sales outside China exceeding those in the Chinese market. Among emerging EV makers, Leap Motor still firmly held the top spot in deliveries, with 28,067 units delivered in February, up 10.99% YoY; cumulative deliveries in 2026 reached 60,126 units, up 19.16% YoY. While releasing its February delivery figures, Leap Motor said its March car purchase incentives had gone live, with discounts of up to 46,000 yuan for in-stock vehicles. Li Auto delivered 26,421 units in February, up 0.6% YoY. Cumulative deliveries in 2026 reached 54,089 units, down 3.74% YoY. As of February 28, 2026, Li Auto’s historical cumulative deliveries totaled 1.594 million units. Li Auto said that as of February 28, 2026, it had 539 retail centers nationwide, covering 160 cities; 548 after-sales repair centers and authorized service centers, covering 223 cities. Li Auto had put into use 4,054 Li Auto supercharging stations nationwide, with 22,447 charging piles. NIO delivered 20,797 new vehicles in February, up 57.65% YoY. Cumulative deliveries in the first two months of 2026 reached 47,979 units, up 77.34% YoY. To date, NIO has delivered a total of 1,045,571 new vehicles. At 22:33:18 on February 6, NIO completed its 100 millionth battery swap; during the 2026 Chinese New Year holiday, NIO provided a cumulative 2,073,500 battery swapping services, with daily average services up 29.4% YoY versus the Chinese New Year holiday last year. From February 15 to February 23, NIO Energy's cumulative highway charging and battery swapping volume exceeded 25.28 million kWh, accounting for 15% of the national highway charging and battery swapping total. Starting from February 18 (the second day of the Chinese New Year), NIO battery swapping set new single-day service records for five consecutive days. XPeng Motors delivered a total of 15,256 new vehicles in February, bringing cumulative deliveries in the first two months of 2026 to 35,267 units, down 42% YoY. In February, the all-new XPeng G6 launched in the UK, with the entire lineup equipped as standard with an 800V high-voltage platform and a new-generation LFP battery, while introducing an all-wheel-drive performance black edition for the first time. The XPeng G6 has now been exported to more than 40 countries and regions worldwide, covering Asia-Pacific, Europe, the Middle East and North Africa, and Latin America, and continues to win favour among an increasing number of overseas consumers. As for Xiaomi Auto, its deliveries exceeded 20,000 units in February, while January deliveries exceeded 39,000 units, bringing cumulative deliveries in the first two months of 2026 to 59,000 units. Notably, the Xiaomi YU7 continued to rank first in sales in February and has now held the top spot for six consecutive months. In February 2026, Xiaomi YU7 sales reached 20,196 units, ranking among the top three passenger vehicle models nationwide for the month. As for BYD, China's "EV king," February sales reached 190,190 units, retaining its position as China's NEV sales champion. In January-February 2026, BYD Group's cumulative sales reached 400,241 units, while cumulative overseas sales of passenger vehicles and pickups totaled 200,160 units, and cumulative new energy vehicle sales exceeded 15.5 million units. On March 5, BYD unveiled the second-generation blade battery. Wang Chuanfu, Chairman of BYD Group, said that the second-generation blade battery can charge from 10% to 70% in 5 minutes, and from 10% to 97% in just 9 minutes. The second-generation blade battery offers 5% higher battery energy density than the first-generation blade battery. Car models equipped with the second-generation blade battery include the Yangwang U7, Denza N9, Fangchengbao Tai 3, Seal 07, Datang, Sea Lion 06, Song Ultra, Fangchengbao Tai 7, Denza Z9GT, and Yangwang U8L, among which the Denza Z9GT has a driving range of 1,036 km. Regarding auto industry sales in February 2026, Cailian Press quoted an executive at a new carmaker as saying, "Affected by the longest-ever nine-day Chinese New Year holiday in February, the auto industry's effective production and sales period was significantly shortened, making it a typical off-season for auto consumption. Combined with the phased reduction in the vehicle purchase tax incentive, the auto industry as a whole remained subdued and full of challenges.” Looking ahead to the passenger vehicle market in March, the CPCA said that March this year had 22 working days, one more than the 21 working days in March 2025. As industries across the board rapidly returned to normal operations after the Chinese New Year holiday, production and sales growth in March is expected to rise sharply MoM. The post-Chinese New Year period is an important window for new product launches, and many producers rolled out a large number of new vehicles. Driven by national pro-consumption policies, many provinces and cities introduced corresponding measures to stimulate consumption, while the full resumption of offline activities such as auto shows will also accelerate the return of foot traffic. As prices of lithium carbonate, copper, and other materials have remained high recently, coupled with the continued anti-involution trend, producers are expected to launch relatively few new energy car models offering better-than-expected value for money, leaving limited potential for an explosive rebound in auto consumption. Although the recent Middle East crisis caused some transportation disruptions, China’s complete vehicle enterprises shifted from “chartering vessels and waiting for shipping space” to “building ships and controlling transport,” with rapid expansion of their own fleets, greater autonomy and control over shipping capacity, and significant optimization in cost and efficiency. Our sales support capabilities are stronger than those of other international automakers, and if the crisis does not last long, export transportation will not be significantly affected. As the national trade-in policy is fully implemented, the consumer potential for replacement and upgrade purchases will be gradually released, helping the auto market strengthen steadily in March. In 2026, policy subsidies and structural optimization in the auto industry will become key factors in leveraging overall market prosperity and accelerating the premiumization of new energy vehicles. Although the 2026 consumer goods trade-in subsidy fund of 250 billion yuan was down 50 billion yuan from 2025, the 100 billion yuan in special fiscal and financial coordinated funding to boost domestic demand can reduce financing costs for residents’ car purchases and automakers through loan interest subsidies and financing guarantees, effectively stimulating endogenous consumption momentum and expanding new room for domestic demand. Huachuang Securities pointed out that since March, the passenger vehicle retail market has begun to improve, with foot traffic and transactions gradually recovering, mainly due to the digestion of deferred wait-and-see demand from last year and the launch of new models. Attention should be paid to market acceptance of new vehicles after price increases and to dynamic adjustments by automakers. Although the subsidy amount per vehicle declined this year, coverage may expand. Combined with the low base in H2 last year, industry retail sales growth in H2 is expected to turn positive, with full-year retail growth expected at 1%, including +5% for EVs. Export data for January-February exceeded expectations, and full-year exports are expected to surpass 7.1 million units, boosting wholesale growth by about 3%, including +8% for EVs. In February, due to weaker demand during the Chinese New Year, the new energy penetration rate remained firm at 48%. Current total channel inventory is about 3.4 million units, an increase of about 600,000 units compared to the same period last year. Rising Prices of Memory Chips and Precious Metals, Some Automakers Warn of Cost Pressure It is worth noting that as memory chip and precious metal prices have fluctuated upward recently, some automakers in the market have begun trying to respond to supply chain cost pressure through “price increases.”Monitoring data from TrendForce showed that since H2 2025, prices of DDR4 memory used in automotive-grade DRAM have risen by more than 150% cumulatively, while DDR5 memory prices have surged by 300%. Data provided by UBS showed that over the past three months, automotive-grade DRAM prices as a whole increased by 180%. According to incomplete statistics, since the start of 2026, multiple automakers, including NIO, Li Auto, VOYAH, Xiaomi, and Zeekr, have issued warnings or been reported to be facing cost challenges brought by chip price increases. In a livestream, Deepal Chairman Deng Chenghao said that current production costs have risen by several thousand yuan compared with earlier levels, with the pressure mainly coming from wild swings in power battery and in-vehicle memory chip prices; Li Auto Vice President of Supply Chain Meng Qingpeng even warned that the supply fulfillment rate for automotive memory chips in 2026 may be less than 50%; Xiaomi Chairman Lei Jun mentioned in a livestream in January that the new Xiaomi SU7 is facing memory cost pressure that is jumping quarter by quarter, with memory cost per vehicle expected to increase by several thousand yuan. However, according to the latest news from NIO on March 11, NIO founder and chairman Li Bin said that rising prices of memory and other raw materials have impacted the cost of high-end new energy car models by 3,000 to 5,000 yuan respectively, with the total impact nearing 10,000 yuan. At present, NIO’s existing system can support the pressure brought by rising costs, and the company currently has no plan to adjust prices. At the Q4 and full-year 2025 earnings call, Li Auto President Ma Donghui said that in response to the impact brought by the current increase in parts prices, Li Auto will strengthen coordination with supply partners and sign long-term LTA agreements with relevant suppliers to lock in prices or allocations in advance. If there is a price adjustment mechanism, it will be strictly implemented in accordance with the contract; where there is no price adjustment mechanism, the company will also share costs with suppliers. It will absorb as much of the pressure from external price increases internally as possible, including through its self-developed range extender and self-developed chips. “Li Auto will comprehensively consider parts costs and user value in determining the pricing of new car models, and is confident that through a series of measures it can keep the impact of raw materials within a reasonable range,” Ma Donghui said. UBS warned that chip shortages may begin disrupting global auto production as early as Q2 this year, with EV manufacturers that are highly dependent on advanced chips expected to be affected the most.

[SMM Tin Midday Review: Center of the Most-Traded SHFE Tin Contract Moved Lower, Trading Was Slightly Sluggish Amid Structural Divergence in End-Use Demand]

According to The Information, citing people familiar with the matter, Alibaba, ByteDance, and Tencent have turned to domestic chipmakers to ease pressure from the worsening global memory chip shortage. The companies are reportedly in talks to purchase more commodity memory chips (i.e., DRAM) and NAND flash memory from two Chinese firms. The report said that in recent months, Alibaba, ByteDance, and Tencent have sought additional chip supplies from Samsung Electronics and SK Hynix.

International Data Corporation (IDC) stated that due to the shortage of memory chips, the global smartphone market will shrink by 12.9% in 2026, which will be an "unprecedented crisis." IDC currently forecasts global smartphone shipments of approximately 1.1 billion units in 2026, down from 1.26 billion units the previous year, erasing years of steady growth. To cope with rising component costs, smartphone manufacturers are cutting specifications, discontinuing entry-level models, and guiding consumers toward higher-end devices. Nabila Popal, Senior Research Director at IDC, said, "We expect the situation will not ease until at least mid-2027.

Intel (INTC.O) CEO Chen Liwu stated that the memory chip shortage in the computer industry is likely to persist for at least two years. He said on Tuesday, "To my knowledge, there are no mitigation measures in place at the moment." Chen Liwu mentioned that he had spoken with two key figures in the memory field, who told him, "There will be no relief until 2028." The massive infrastructure development for artificial intelligence has significantly increased the demand for memory chips, which has reduced the supply of chips available for traditional computers and smartphones. This has led to chip shortages and price increases—potentially dampening consumer willingness to purchase these products. Chen Liwu also pointed out that Nvidia, as a leading supplier of AI processors, will further drive up memory demand with its latest Rubin platform and next-generation products, noting that AI will "consume a vast amount of memory.

[SMM Tin Morning News: The most-traded SHFE tin contract opened slightly higher in the night session and maintained a high-level sideways trend, with spot cargo transaction willingness showing initial signs of rebound]

The US industrial sector is closely monitoring developments in the Sino-US trade situation, as their inventory of rare earths is running low. On April 4 this year, China's Ministry of Commerce (MOFCOM), in conjunction with the General Administration of Customs, issued an announcement on implementing export control measures for seven categories of medium-heavy rare earth-related items, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, to exercise export controls over strategic resources with significant dual-use attributes. Multiple manufacturing industries in the US that rely on critical raw materials of rare earths are under considerable supply pressure. Gracelin Baskaran, Director of the Critical Minerals Security Project at the Center for Strategic and International Studies (CSIS), stated that currently, the inventory of rare earths held by US enterprises can only sustain operations for about two to three months. If there is no new progress in the situation, the US industrial sector will be unable to carry out production activities. She further pointed out that if export controls on rare earths are only temporarily relaxed in the future, US manufacturers may still continue to face difficulties, as it is challenging for the industry to accurately predict production conditions over the next three, six, or twelve months. During the regular press conference of the Ministry of Commerce on June 5, a media outlet asked, "Some foreign enterprises believe that the process for obtaining export licenses for China's rare earths is slow, and their enterprises may face production shutdowns. How does the Chinese side respond to this?" In response, He Yongqian, the spokesperson for the Ministry of Commerce, stated that rare earths and other related items have significant dual-use attributes, and implementing export controls on them is an international common practice. The Chinese government reviews export license applications for dual-use items in accordance with laws and regulations. Applications that meet the requirements will be approved to promote and facilitate compliant trade. On June 7, the spokesperson for the Ministry of Commerce again answered questions from reporters regarding the export control measures for medium-heavy rare earths: "We have noticed that with the development of industries such as robotics and new energy vehicles (NEVs), the demand for medium-heavy rare earths in civilian applications is growing continuously across countries. As a responsible major country, China fully considers the reasonable demands and concerns of various countries in civilian applications and reviews export license applications for rare earth-related items in accordance with laws and regulations. A certain number of compliant applications have been approved in accordance with the law, and the review process for compliant applications will continue to be strengthened." The Passive US Industrial Sector An expert pointed out that the US automotive industry is concerned about the shortage of rare earth elements, and large-scale production shutdowns may even occur in the coming months. This situation has already evoked memories of the chip shortage in previous years and may even escalate into a more severe crisis. Four years ago, the shortage of computer chips caused by supply chain disruptions ultimately halted automobile production, pushing car prices to record highs. Limited supply has forced most people to pay higher prices for new cars. Experts emphasize that while people believe only EVs are affected by rare earths, the reality is that every car is equipped with sensors that require rare earth elements. The motors in windshield wipers also rely on rare earths, and such sensors are needed in seat belts as well. If rare earth supply is not restored, production disruptions will occur across various industries. Baskaran revealed that Ford has been forced to shut down its Chicago plant, which produces the Explorer, for a week. However, Ford has neither confirmed nor denied that the shutdown was caused by a shortage of rare earths. Roderick Eggert, a professor at the Colorado School of Mines and Deputy Director of the Critical Materials Institute under the US Department of Energy (DOE), stated that because rare earths are crucial to important US industries, the US is striving to find substitutes, such as other types of magnets or motors that do not use magnets at all. However, Eggert also acknowledged that any alternative solutions have limitations and may come at the cost of reduced performance.

The 2025 (10th) New Energy Industry Expo Successfully Concluded! Industry Leaders Gathered to Discuss Hot Topics! [CPCA: AEB Installation Rate in the Passenger NEV Market Reached 62.9%] The China Passenger Car Association (CPCA) released the February 2025 Intelligent Connected Vehicle Insight Report. The report indicated that the overall AEB installation rate performed well from January to February, with the overall installation rate for passenger vehicles reaching 56.5%, and the proportion of passenger vehicles priced at 160,000-240,000 yuan reaching 70.2%. There is still room for growth. The AEB installation rate in the passenger NEV market has reached 62.9%. On one hand, the installation rate is growing rapidly; on the other hand, the strict triggering conditions of the AEB function may lead to its failure, as recent incidents involving some companies have highlighted certain defects in the current AEB function. The MIIT recently required automakers to strictly prohibit exaggerated claims about intelligent driving in a meeting, marking the official entry of the intelligent driving industry into an era of "strong regulation." [Suppliers "In Trouble": US Auto Industry Writes to Trump Administration] Six organizations representing the US auto industry urged the Trump administration in a letter to government officials not to impose a 25% tariff on auto parts set to take effect on May 3, stating that it could jeopardize US auto production. The letter pointed out that many auto suppliers are already "in trouble" and cannot afford additional cost increases, which could lead to broader industry issues. The letter was signed by leaders of the Alliance for Automotive Innovation, the American International Automobile Dealers Association, the Motor & Equipment Manufacturers Association, the Original Equipment Suppliers Association, the National Automobile Dealers Association, and the American Automotive Policy Council, and was addressed to US Treasury Secretary Scott Bessent, US Commerce Secretary Howard Lutnick, and US Trade Representative Ambassador Jamison Greer. [South Korea’s Industry Minister: Will Discuss Trade Imbalance with US Counterparts] South Korea’s Industry Minister stated that he will discuss trade imbalance issues with US counterparts; will make every effort to quickly find a solution to the US auto tariff issue; defense costs may become part of the discussion, and they are prepared for it. [NIO CEO: Pure EVs Are the Ultimate Solution] NIO’s CEO stated that he is confident that pure EVs are the ultimate solution as battery costs decline and charging and battery swap infrastructure expands. [US ITC Issues Final Determination on Section 337 Investigation of Rechargeable Batteries and Components] The US International Trade Commission (ITC) announced on April 21 that it issued a final determination on the Section 337 investigation of certain rechargeable batteries and components (Investigation No. 337-TA-1421): it will not review the initial determination (No. 19) made by the administrative law judge on March 21, 2025, and based on the settlement, the investigation against the listed respondents, Dragonfly Energy Corp. of Reno, NV, and Dragonfly Energy Holdings Corp. of Reno, NV, is terminated. (Cailian Press) [CPCA: Tariff Hike Will Further Accelerate Localization of Auto Chips] The China Passenger Car Association (CPCA) released the February 2025 Intelligent Connected Vehicle Insight Report, which pointed out that after the chip shortage in 2021, many domestic automakers have started using self-developed chip products. Currently, the localization rate of all chips in China is roughly 20%, with state-owned automakers achieving a higher localization rate. The tariff hike will further accelerate the localization process of auto chips, with analog chips being replaced faster, while digital chips are still dominated by foreign companies. Related Reading: SMM: Global LFP Production Expected to Continue Rising, Prices Still Largely Affected by Lithium Carbonate [New Energy Summit] [SMM Analysis] China Imported 534,500 mt of Spodumene in March [SMM Data] LiPF6 Import and Export Data for March 2025 LFP Material Import and Export Situation in March [SMM Analysis] [SMM Analysis] Ternary Cathode Import and Export Volume in March: Imports Up 31% MoM, Exports Up 36% MoM [SMM Analysis] Market Recovery in March, Artificial Graphite Exports Increased [SMM Analysis] Ternary Precursor Export Situation in March [SMM Analysis] Overseas Lithium News, April 14-18 [SMM Analysis] Weekly Review of the Lithium Carbonate Market: Prices Stabilized, Buyers and Sellers Remain Deadlocked [SMM Analysis] Lithium Hydroxide Weekly Market, April 14-18 [SMM Analysis] Ternary Material Prices Dropped Slightly This Week [SMM Analysis] Ternary Precursor Prices Slightly Corrected This Week [SMM Analysis] Dry Separator Prices Expected to Bottom Out [SMM Analysis] Anode Material Prices Remained Stable This Week LFP Material Market Weekly Update [SMM Analysis] [SMM Analysis] ESS Battery Cell Weekly Price Trend Analysis, April 11-17 [SMM Analysis] Dry Separator Showed an Upward Trend This Week [SMM Analysis] Power Battery Cell Prices Remained Stable with Slight Fluctuations [SMM Analysis] Lithium Mine Weekly Market, April 14-18 [SMM Analysis] Graphitisation Tolling Services Prices Remained Deadlocked This Week [SMM Analysis] Recent Electrolyte Prices (April 14-17, 2025) [SMM Analysis] Petroleum Coke Prices Held Steady This Week, Needle Coke Prices Showed a Slight Downward Trend [SMM Analysis] A Review of Waste Battery for Cascade Utilization Price Trends This Week (April 14-17, 2025)

Facing escalating trade tensions, the U.S. sharply raised tariffs on Chinese imports to a dramatic 104%, intensifying debates about their real impact. While the White House asserts these measures will revive domestic manufacturing, deeper analysis suggests the tariffs may serve more as political signals than effective economic solutions. This article examines the strategic motivations, practical limitations, and long-term implications of America's unprecedented tariff policy.