In a recent development, the electric vehicle (EV) battery market witnessed a significant decline in prices during the month of August. According to TrendForce, a leading market research firm, the average selling price (ASP) of EV cells in China dipped below CNY 0.6 per watt-hour (Wh) last month. This drop in prices extended to various types of EV batteries, including square ternary cells, LFP cells, and pouch ternary power cells, all experiencing a 10% reduction in their respective prices. The individual prices for these battery types were reported at CNY 0.65/Wh, CNY 0.59/Wh, and CNY 0.7/Wh.
This downward trend in EV battery prices reflects a subdued growth pattern in the market due to insufficient downstream demand, which has affected both supply and demand dynamics. Furthermore, the initial expectations of robust demand in the energy storage sector for August were not met, primarily due to weakened overseas demand. This led to a slowdown in battery production, resulting in energy storage cell prices falling below CNY 0.6/Wh. China’s energy storage cell production capacity is now experiencing a surplus, raising concerns about an impending price war and the likelihood of continued gradual price declines throughout the remainder of the year.
The consumer electronics sector also faced sluggish demand in August, prompting battery cell suppliers to focus on liquidating their existing inventories. Notably, TrendForce indicates that the prices of lithium salts and cobalt [II, III] oxide continued their decline without signs of stabilizing. Consequently, manufacturers have adopted a cautious approach, maintaining their current production levels. This suggests that the prices of LCO batteries are likely to continue on a downward trajectory throughout September.
The weakened demand in both the power and energy storage sectors has had a considerable impact on lithium salt prices, which saw a significant drop to an average of CNY 230,000 per ton in August—a substantial quarter-over-quarter decrease of 20%. TrendForce has raised concerns about the possibility of prices plunging to less than CNY 200,000 per ton, causing buyers to become more hesitant about making purchases. However, there is a glimmer of hope as suppliers have begun implementing production cutbacks, potentially offering a stabilizing effect on lithium salt prices as we approach the month of September.