TrendForce Report: EV Battery Prices in China Decline by 2% in October, Predicted to Persist Through 2024


In a recent report by TrendForce, it has been revealed that the EV battery market in China is currently facing a period of turbulence, largely attributed to a significant lack of demand. Battery suppliers, in response to this challenging market condition, are showing reluctance to replenish their inventories. Instead, they are concentrating on depleting their existing stocks. Consequently, this has led to a dearth of demand, which is impacting the prices of upstream lithium materials and causing a continuous decline in Average Selling Prices (ASP).

As of October, the ASP of power cells in China has maintained a downward trajectory, although it appears that the rate of decline has somewhat stabilized when compared to August and September. Notably, EV batteries observed a 2% price reduction, consumer Lithium Cobalt Oxide (LCO) batteries decreased by 1.3%, and energy storage cells saw the most significant drop at 3.3%.

This sustained weak demand in both the EV and energy storage sectors has prompted battery suppliers to slow down their procurement of raw materials. With the traditional peak season now behind, it seems unlikely that there will be any significant improvement in demand before the year’s end. This situation is expected to intensify challenges for midstream and downstream firms in depleting their inventories and adjusting their stock levels efficiently. In response, upstream companies are advised to promptly adjust their production capacities to prevent excessive stockpiling, which could lead to intensified price wars.

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The energy storage sector experienced a notable contraction in order volumes in October, primarily due to a decline in demand from overseas markets. This has disrupted export orders for battery suppliers, resulting in increased industry inventory levels and fierce competition in battery pricing. The average price of Lithium Iron Phosphate (LFP) cells has dropped to CNY 0.5/Wh, with the lowest prices nearing CNY 0.4/Wh. It is anticipated that prices of energy storage cells will continue to fall in November due to the current high inventory levels and reduced end-user demand.

In contrast, the consumer electronics sector saw a slight demand recovery in October. The introduction of new products has injected some vitality into the market and provided a boost to digital consumer end-products. Additionally, a minor increase in the price of cobalt has offered some support to battery costs. Nevertheless, this has not been sufficient to counterbalance the pressure from the simultaneous drop in the prices of lithium carbonate and other raw materials, resulting in a continued decline in the price of LCO batteries in October. The rate of decline has slowed to 1.3%, with expectations for prices to stabilize in November.

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Looking ahead to 2024, the Chinese New Energy Vehicle (NEV) market is expected to maintain strong growth resilience, with further growth predicted in the EV markets in Europe and North America, especially in the United States, where the EV penetration rate is still below 10%. In the short term, the US market is likely to continue relying on the Chinese supply chain, given Europe’s slow progress in localizing its EV battery industry and the dominance of Japanese and Korean battery suppliers in the US market. Consequently, Chinese lithium-ion battery exports are projected to perform well in 2024. However, the ongoing release of new production capacity and scaling up in the Chinese lithium-ion battery industry in 2023 is expected to lead to overcapacity, extending into 2024, with EV battery prices anticipated to continue their gradual decline.

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