China Extends NEV and Electronics Incentives into 2025, Boosting Metals Demand

NEV

The Chinese government has announced the continuation of incentives through 2025 to stimulate the consumption of new energy vehicles (NEVs) and electronics. This decision is expected to bolster demand for nonferrous metals amid economic challenges, providing significant support to the sector.

NEV Subsidies and Expansion of Eligible Vehicles

The extended policy includes substantial subsidies for NEV purchases, encouraging the replacement of older internal combustion engine vehicles. Key subsidy details include:

Up to 20,000 yuan ($2,729) for consumers scrapping an old vehicle when purchasing a new NEV.

• Up to 15,000 yuan for those trading in an old vehicle.
• The eligibility standard for scrappage subsidies has been eased to the National IV Emission standard from National III, increasing accessibility.
• 80,000 yuan subsidies for replacing new energy buses over eight years old or for bus power batteries past their warranty.
• Support for electric bicycle replacements in 2025.

With NEVs—including battery electric vehicles (EVs), plug-in hybrids, and fuel cell vehicles—being a core part of China’s automotive policy, these incentives could significantly impact the metals market. Industry estimates indicate that the subsidies represent 8-11% of the average NEV price in China.

Impact on Metals Markets

NEV production is heavily dependent on nonferrous metals. A single NEV requires over 200kg of metal minerals, including approximately 50-70kg of lithium carbonate and 0.75kg of praseodymium-neodymium. With China’s NEV sales projected to reach nearly 12 million units in 2024—a 20% increase year-on-year—these policies will be crucial in sustaining metal demand.

In addition to NEVs, subsidies for electronics and home appliances in 2025 are expected to support metals consumption. Consumers will receive:

• Up to 500 yuan for new electronics (phones, tablets, smartwatches) under 6,000 yuan.
• Up to 2,000 yuan for replacing home appliances (refrigerators, washing machines, TVs).

The extension of these incentives is particularly significant as the metals market faces pressure from oversupply and weak demand due to economic challenges. These policies provide a much-needed demand boost for critical metals, including lithium, rare earth elements, and other nonferrous metals essential to the NEV and electronics industries.