Sunday, February 25, 2024
BusinessEV Battery Prices Fell by 4–7% in January, Decrease...

EV Battery Prices Fell by 4–7% in January, Decrease Expected to Slow Down in February, Says TrendForce

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TrendForce’s latest research indicates that the global lithium battery market remained subdued in January, with cell makers still working through their inventories and production rates lingering at low levels. The ASP of EV cells has continued to fall—the most significant drop was observed in EV pouch cells, which saw a MoM decline of 7.3% to CNY 0.51/Wh. While prices are expected to continue declining in February, the rate of decrease is likely to slow down.

In the ESS sector, with the Lunar New Year on the horizon, market demand has shown no significant fluctuations. Though the production rate for ESS cells did not match that of EV cells, prices remained relatively stable, with a MoM decline of 2.2% to CNY 0.44/Wh.

Demand was weak in January for consumer cells, compounded by a continuous drop in the price of lithium cobalt oxide and a 7.4% MoM decrease in cathode prices. This led to a slight decrease in the cost of LCO cells in January with a MoM drop of 5.9% to CNY 5.43/Ah. Currently, the price of raw materials has stabilized and as the Chinese New Year approaches, small-scale rigid demand replenishment among raw material suppliers has led to a slight rebound in lithium prices after stabilizing, while cobalt prices have generally remained steady.

However, given that downstream demand has not yet fully recovered, the momentum for a continued rebound in raw prices appears insufficient. Consequently, the overall price trend for consumer cells in February is expected to remain stable.

TrendForce notes that lithium salt prices have stabilized, but the growth of the EV market may slow down in 2024, as mentioned by Tesla in their Q4 earnings call last year, indicating an expectation for moderated sales growth this year. Faced with increased market competition and buyers’ pursuit of cost reductions, Chinese battery suppliers are likely to opt for cost-cutting measures, aiming to push EV cell prices down to CNY 0.3/Wh in 2024. This strategy could pose operational challenges for suppliers who are at a disadvantage in securing raw materials. Given these trends, the overall market average price of battery cells is expected to slightly decrease in the first quarter.

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