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.

Vietnamese EV maker VinFast announced it has signed agreements with two Indonesian transportation companies to supply 20,000 pure electric vehicles over the next three years. Indonesia was VinFast's largest overseas market last year, primarily driven by the imported VF 3 and VF 5 models.

[SMM Tin Morning Brief: The Most-Traded SHFE Tin Contract Pulled Back After Fluctuating During the Night Session, Trading Was Sluggish as Most Downstream Enterprises Had Already Suspended Production for the Chinese New Year Holiday]

[SMM Morning Meeting Summary: US December Retail Sales Unexpectedly Stagnate, LME Zinc Center Shifts Upward] Overnight, the LME zinc contract opened at $3,367.5/mt. At the beginning of the session, bulls and bears were intertwined, and LME zinc experienced wide swings along the daily average line, touching a low of $3,351/mt during the period. Subsequently, bulls increased their positions, and LME zinc rose during the night session, reaching a high of $3,405/mt towards the end of the session. It finally closed up at $3,398/mt, an increase of $14/mt, a gain of 0.47%. The trading volume increased to 8,008 lots, and the open interest increased by 1,328 lots to 231,000 lots.

Futures: Overnight, LME lead opened at $1,974/mt, touched a high of $1,981.5/mt during the Asian session before fluctuating downward; it probed a low of $1,960.5/mt during the European session, then rose in late trading to close at $1,977.5/mt. Overnight, the most-traded SHFE lead 2603 contract opened at 16,660 yuan/mt, touched a low of 16,635 yuan/mt early in the session before fluctuating upward to a high of 16,750 yuan/mt, and finally closed at 16,705 yuan/mt, up 0.24%, forming a small bullish candlestick. On the macro front: CME Group: Plans to launch single-stock futures this summer. US Fed—①Hammack: Economic outlook is positive, inflation remains high, no urgent need for interest rate cuts this year. ②Logan: Adopts a "cautiously optimistic" stance on the effectiveness of current interest rate policy, more concerned about inflation. US December retail sales month-on-month recorded 0%, below the median forecast of 0.4%, previous value 0.60%. According to the EU-China Chamber of Commerce, the European Commission accepted Volkswagen's price commitments for China-made pure electric vehicles. China's National Development and Reform Commission (NDRC) issued implementation opinions on accelerating the promotion and application of artificial intelligence in the bidding sector. Li Qiang: Reasonably develop rare earth resources, actively promote breakthroughs in key core technologies. The central bank released the China Monetary Policy Execution Report for Q4 2025: Continue to implement appropriately accommodative monetary policy. : Market circulation cargoes were limited in Jiangsu, Zhejiang, and Shanghai, coupled with most logistics being suspended, suppliers' quoting enthusiasm significantly decreased, with a few quoting following the market, mainly cargoes self-picked up from production site. Quotations for mainstream origin primary lead cargoes self-picked up from production site against the SMM #1 lead average price were at discounts of 30 yuan/mt to premiums of 50 yuan/mt ex-works. Secondary lead side, smelters awaited the holiday, quotations were scarce, a few secondary refined lead quotations against the SMM #1 lead average price were around parity ex-works. Additionally, most downstream enterprises had halted production, some operating enterprises were also in the final stage, spot order procurement basically stopped, and transactions were rare in the spot market. Inventory side: On February 10, LME lead inventory was flat from the previous day at 232,750 mt. As of February 9, SMM lead ingot social inventory across five areas rose to a five-month high. Today's lead price forecast: Enterprises across the lead industry chain successively entered the holiday period, trading activity significantly decreased. Most primary lead suppliers completed clearing inventory last week, spot order quotations were scarce; many secondary lead smelters were on holiday and reluctant to sell at low prices, most enterprises suspended quotations. Downstream enterprises generally entered the year-end final stage, stockpiling targets were completed, and inquiry willingness was low. Additionally, as the Chinese New Year holiday approaches, logistics and transportation have tightened, and the spot market is experiencing light trading activity. Overall, the impact of fundamentals on lead price trends before the holiday has weakened, with attention turning to fluctuations in overseas markets that may affect lead prices. Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, and are for reference only, not constituting decision-making advice.

[BYD Officially Enters Argentina's Passenger Car Market] Chinese new energy vehicle manufacturer BYD officially launched three electric and hybrid cars in Buenos Aires, the capital of Argentina, on the 8th, marking the brand's formal entry into Argentina's passenger car market. The models released include two pure electric vehicles—the Dolphin MINI and Yuan Pro—as well as the plug-in hybrid model Song Pro DM-i. BYD Argentina Sales Director Bernardo Fernández Paz stated that over 1,500 units have been pre-sold in the first batch, indicating growing local consumer interest in new energy vehicles.

At the 2025 SMM (2nd) Global Renewable Metal Industry Chain Summit - Main Forum hosted by SMM Information & Technology Co., Ltd., Allen Cui, Director of SMM Nonferrous Consulting, shared insights on the topic of "Prospects for the Development of the Global Secondary Metal Industry."

Recently, the First Hainan Free Trade Port Hydrogen Energy Vehicle Industry Development Seminar was held in Haikou City, Hainan Province. Shanghai Shunhua New Energy System Co., Ltd. (hereinafter referred to as "Shunhua New Energy") signed a strategic cooperation agreement with Hainan Haima Automobile Co., Ltd. and Sinopec (Hainan) Branch to jointly establish Hainan Free Trade Port's first zero-carbon emission automotive ecosystem covering the "production-storage-refueling-utilization" entire industry chain. This marks a substantive step forward in the industrialisation of hydrogen energy vehicles in Hainan, providing crucial support for achieving the industrialisation goal of hydrogen energy vehicles in Hainan by 2030. Hainan's Dual Advantages Propel Hydrogen Energy Industry onto Fast Track of Development Leveraging its policy advantages and geographical location, Hainan Free Trade Port is accelerating the layout of the hydrogen energy industry. According to the Medium and Long-Term Plan for the Development of Hainan's Hydrogen Energy Industry (2023-2035), Hainan will promote the commercial replacement of hydrogen fuel cell vehicles in stages in fields such as cold chain logistics vehicles, short-haul heavy-duty trucks, and tourist buses, gradually expanding into the passenger vehicle market. Huang Wencong, Deputy Director-General of the Hainan Provincial Department of Industry and Information Technology, pointed out that Hainan's unique geographical closed-loop characteristics and differentiated application scenarios provide a favorable market environment for hydrogen fuel cell vehicles. Meanwhile, relying on the "early and pilot implementation" policy advantages of the Free Trade Port, Hainan provides a testing ground for formulating standards for the hydrogen energy industry. Lu Guogang, Vice Chairman of Haima Automobile and General Manager of Hainan Haima, analyzed that with breakthroughs in core localisation technologies, when the annual production of hydrogen energy vehicles exceeds the 10,000-unit threshold, the material cost of complete vehicles is expected to be on par with or even lower than that of pure electric vehicles of the same class. It is projected that by 2030, the usage cost of hydrogen energy vehicles in Hainan will drop to 0.25 yuan per kilometer, comparable to that of pure electric vehicles. By then, the province's hydrogen vehicle ownership may exceed 10,000 units, with 66 supporting hydrogen refueling stations." To address the dual bottlenecks of scarce hydrogen energy resources and high hydrogen prices hindering the current development of the hydrogen energy industry, Zhang Yu, founder of the Hydrogen Energy Branch of the China Industrial Development Promotion Association, suggested that Hainan could rely on abandoned power resources from renewable energy sources such as PV and wind power to deploy local hydrogen production projects, thereby solving the problem of high hydrogen supply costs. To provide a technological pathway for resolving the contradiction between "hydrogen shortage" and "high hydrogen prices," Shunhua New Energy will deploy multiple hydrogen refueling stations around regional hydrogen production centers, constructing a "parent station + several child stations" asteroid-shaped hydrogen refueling network. Shunhua New Energy's Innovative Projects Accelerate the Commercialization Process of Hydrogen Energy As a leading domestic supplier of overall solutions for hydrogen energy systems, Shunhua New Energy plans to commence the construction of an asteroid-shaped hydrogen refueling station infrastructure network by the end of 2025, with priority given to promotion in Haikou and Sanya. "The "Asteroid Plan" is an implementation plan for the phased and rapid large-scale promotion of fuel cell vehicles (FCVs), with passenger cars as the most-traded contract car models. It also involves the construction of a hydrogen refueling network, primarily consisting of small 70MPa hydrogen refueling stations (in a combined oil-hydrogen refueling mode), supplemented by medium-sized 35MPa/70MPa hydrogen refueling stations (in a pure hydrogen mode). Additionally, it includes the construction of hydrogen source infrastructure for hydrogen production from renewable energy sources (supplemented by industrial by-product hydrogen) and nuclear power-based hydrogen production. Sunrise New Energy will leverage its extensive experience in hydrogen storage and transportation equipment, as well as hydrogen refueling equipment solutions, to assist Hainan in creating a replicable hydrogen energy commercialization template. This will achieve the dual objectives of optimizing construction costs and improving operational efficiency, providing infrastructure support for the large-scale development of the industry. As of now, the Haima 7X-H hydrogen fuel cell vehicle demonstration operation project has accumulated over 2 million kilometers of safe driving, serving the Boao Forum for Asia, the China International Consumer Products Expo, and the World New Energy Vehicle Congress, achieving a "zero-fault" operation record for 2 million kilometers. These vehicles are equipped with Sunrise New Energy's 70MPa on-board hydrogen supply system, allowing for a single hydrogen refueling time of just 3-5 minutes and a driving range exceeding 600 kilometers. Their technical indicators have reached internationally leading levels, validating the technical feasibility and economic efficiency of the "Hainan Model." Deepening Strategic Synergy: Building a Benchmark for Full-Chain Synergy in the Hainan Model With the in-depth implementation of the "Overall Plan for the Construction of the Hainan Free Trade Port," the hydrogen energy industry is becoming a key pillar for Hainan to build a clean energy island. Sunrise New Energy will take this strategic cooperation as an opportunity to work together with industry chain partners to advance the construction of vehicle operation platforms and hydrogen refueling stations, promoting the market-oriented development of China's hydrogen energy industry.

The share price of "BYD King" hit a new high again. In the morning trading session today, both BYD's A-shares and H-shares strengthened. The A-shares once again broke through 400 yuan per share, hitting a record high of 404 yuan during the session; the H-shares surged over 4% at one point and broke through 460 Hong Kong dollars per share for the first time, also setting a new record, with the intraday high exceeding 464 Hong Kong dollars. As of the close on May 21, BYD's A-shares had risen approximately 40% year-to-date, with a market capitalization reaching 1.22 trillion yuan. Driven by BYD, the A-share automobile sector performed actively. JMC and JAC rose over 6%, while Seres, CNHTC, SAIC Motor, and Foton Motor followed suit with gains. On the same day, Citi once again raised BYD's target price, stating that the export landscape of China's passenger vehicles in the first four months of this year further favored BYD. Analysts including Jeff Chung noted in the report that BYD's market share in pure electric vehicle exports surged from 23% in FY2024 to 38% in the first four months of FY2025. The growth in China's plug-in hybrid vehicle exports has been astonishing, yet a market consensus has not yet formed. Regarding potential price reductions in 2026, BYD has the strongest ability to cope. BYD is on track to achieve its export target of 800,000 to 1 million units in FY2025. Based on the above assessment, Citi raised BYD's H-share and A-share target prices to 727 Hong Kong dollars and 669 yuan, respectively. Previously, Citi had already raised the target price for the stock in February. The day before Citi raised BYD's share price, Guangzhou Shipyard International announced that BYD's seventh car carrier ship—BYD 7000-unit LNG dual-fuel pure car and truck carrier (PCTC) Ship No. 2—had been launched and undocked. It is understood that this ship is the second vessel built by Guangzhou Shipyard International for BYD, namely the sister ship of the previously launched "Hefei" ship. To meet the overseas market sales target of at least 800,000 units this year, BYD has currently assembled a large "ocean fleet." According to industry insiders familiar with BYD, the fleet will consist of eight PCTCs, all planned to be put into operation within the year. This includes the first "Pioneer No. 1" delivered in January last year, the "Changzhou" ship in November of the same year, as well as the "Hefei," "Shenzhen," "Changsha," and "Xi'an" ships launched in January, March, and April this year, respectively. Industry sources revealed that BYD's Denza Z9GT is expected to be launched in Hong Kong, Macau, and Southeast Asian markets (including Malaysia, Thailand, Indonesia, etc.) in Q3 this year, and will land in Europe in Q4, with plans to open more than ten stores in Europe before the end of the year. In addition to vehicle exports, overseas bases have also become an important fulcrum supporting BYD's target of 800,000 overseas sales. On May 16, Li Yunfei, General Manager of Branding and Public Relations at BYD Group, announced on social media the opening of BYD's European headquarters in Budapest, Hungary. Péter Szijjártó, Hungary's Minister of Foreign Affairs and Trade, revealed on the same day that the total investment in the project was 100 billion Hungarian forints (approximately €248 million), with the Hungarian government planning to provide 20 billion Hungarian forints in support. Szijjártó stated that the project would create 2,000 jobs. According to information released by BYD, the European headquarters will undertake three core functions: sales and after-sales service, vehicle certification and testing, and localized car model design and feature development. Prior to this, in 2023, BYD had already established its first new energy passenger vehicle factory in Europe in Szeged, Hungary, and had built production sites in several countries, including Thailand, Brazil, Indonesia, and Uzbekistan. Among them, the Thailand factory has an annual production capacity of 150,000 units, serving the ASEAN region; the Brazil factory has an annual capacity of 300,000 units, comprehensively covering the Latin American market; and the base under construction in Indonesia has an annual production capacity of 150,000 units, expected to be completed by the end of 2025, targeting the Australian market. The production and sales report shows that from January to April this year, BYD's overseas market sales reached 285,170 units, up 105% YoY; its share of the new energy passenger vehicle market increased from 14.83% last year to 20.99% this year. It is worth noting that, excluding overseas sales of 79,086 units in April, BYD's domestic sales for the month saw a slight MoM decline for the first time this year.

SMM News on May 21: In recent trading days, the automotive sector has seen consecutive gains, achieving four straight days of increases as of May 21. By the close of trading on May 21, the automotive sector index rose by 1.06%. Among individual stocks, JAC surged by over 8%, JMC rose by over 6%, while multiple stocks including King Long United Automotive Industry, Seres, and Hanma Technology followed suit with gains. On the news front, Recently, the Central Committee of the Communist Party of China and the State Council issued the revised "Regulations on Practicing Frugality and Combating Waste in Party and Government Offices," which stipulates centralized procurement of official vehicles, requiring all regions and departments to strictly comply. In this revised version, the management of official vehicles has become a major highlight, explicitly stating that official vehicles should be procured centrally by the government, with a preference for domestically produced vehicles, and priority given to new energy vehicles (NEVs). This move aims to further promote frugality and combat waste in Party and government offices, while also facilitating the green development of the domestic automotive industry. In recent years, the state has also introduced multiple policies to support the development of NEVs, with the promotion of NEVs frequently appearing in the field of official vehicles. Meanwhile, local governments have been continuously issuing relevant supportive policies. According to publicly available information, previously, regions including Shandong and Hainan have required achieving 100% electrification of official vehicles by 2025 (except for special purposes). The General Office of the People's Government of Guangdong Province has also mentioned that the proportion of pure electric vehicles (EVs) in the total number of vehicles equipped and updated in the same year for Party and government offices and public institutions at the provincial level and in the Pearl River Delta region should be no less than 95%. Other cities should refer to the promotion targets of the Pearl River Delta region and determine their own promotion targets based on local conditions. State-owned enterprises should refer to the aforementioned requirements to purchase and use NEVs, and take measures such as building, renovating, or leasing charging and battery swapping facilities to encourage employees to purchase and use NEVs. Shanghai also issued a policy in 2024 stating that by 2027, the proportion of green transportation trips in the central urban area should exceed 75%. Accelerate the comprehensive electrification of vehicles in urban public sectors, with buses and taxis basically achieving electrification by 2025. In principle, new or updated vehicles in public sectors such as Party and government offices, state-owned enterprises and institutions, environmental sanitation, and postal services should use NEVs. Encourage the use of NEVs for new or updated vehicles in urban freight trucks, rental cars, and intra-city charter buses with suitable models. Promoting the electrification of official vehicles can, on the one hand, enhance public acceptance of NEVs through government demonstration, thereby indirectly stimulating the civilian market. On the other hand, it can also significantly reduce operating costs. It is reported that the annual operating cost of new energy official vehicles in Chengdu is approximately 25,000 yuan less per vehicle compared to internal combustion engine vehicles. The market expects that with the continuous deepening of subsequent local policies, there is still greater room for growth in the application of NEVs in the official vehicle market. In addition, Li Chao, Deputy Director of the Policy Research Office and spokesperson of the National Development and Reform Commission (NDRC), stated that in April, retail sales of passenger NEVs reached 905,000 units, up 33.9% YoY; the retail penetration rate of NEVs reached 51.5%, a 7 percentage point increase YoY. Regarding the recent automotive market, according to the China Passenger Car Association (CPCA), from May 1 to 18, nationwide retail sales of passenger NEVs reached 484,000 units, up 32% YoY and 15% MoM; the retail penetration rate of the nationwide NEV market was 52%, with cumulative retail sales of 3.808 million units since the beginning of the year, up 35% YoY. From May 1 to 18, nationwide wholesale sales of passenger NEVs by producers reached 467,000 units, up 23% YoY and 0% MoM; the wholesale penetration rate of NEV producers was 54.4%, with cumulative wholesale sales of 4.448 million units since the beginning of the year, up 40% YoY. On May 21, according to the latest statistics from TrendForce, global sales of new energy vehicles, including battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and hydrogen fuel cell vehicles, reached 4.02 million units in the first quarter of 2025, up 39% YoY, accounting for 18.4% of global auto sales in the first quarter. In terms of individual stocks, although BYD, the leader in the EV sector, did not see a significant increase in its share price today, its share price reached a record high, surging to 404 yuan per share at one point during the trading session, marking a new all-time high since its listing. It is also worth mentioning that, according to media reports, in the recently released Q1 2025 earnings reports of A-share vehicle manufacturers, BYD ranked first with a net profit exceeding 9.1 billion yuan. According to Q1 financial data, BYD's net profit in the first quarter increased by 100.38% YoY. The rapid growth in sales of its NEVs was the main reason for its outstanding performance in the first quarter. It is reported that BYD's cumulative NEV sales in the first quarter reached 1.0008 million units, up 59.81% YoY.