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Are EV Battery Prices Falling?

Published: 9.8.2023

TrendForce's latest insights unveil the current state of China's electric vehicle (EV) battery market, where a reduced demand has set off a chain reaction impacting the dynamics of supply and demand. This ripple effect extends beyond just EV cells and has indirectly influenced both energy storage and consumer electronics sectors.

In August, a noticeable drop in the average selling price (ASP) of EV cells occurred in China. Various types of cells, including square ternary cells, LFP cells, and pouch ternary power cells, experienced a 10% decrease in price. This decline reflects a subdued growth pattern in the EV battery sector, which can be traced back to weakened domestic demand. In turn, this leads to oversupply and intensified competition among battery manufacturers.

Hopes for robust demand in the energy storage market during August were also dashed due to weakened overseas demand. This downward trend encouraged battery manufacturers to reduce their production volumes, causing energy storage cell prices to decline. With an excess production capacity of storage cells, further gradual price reductions are expected throughout the remainder of the year.

In August, experts also witnessed sluggish demand in the consumer electronics sector, compelling battery cell suppliers to focus on depleting their existing inventories. This trend has resulted in a consistent decline in the prices of essential battery materials such as lithium salts and cobalt [II, III] oxide. Unfortunately, there are no signs indicating that these material prices will hit a bottom anytime soon.

The weakened demand in both the power and energy storage sectors has exerted significant downward pressure on lithium salt prices, which plummeted by 20% in August compared to the previous quarter. TrendForce warns that prices may continue to decrease, making buyers increasingly cautious about their purchasing decisions.

Nevertheless, some suppliers have initiated production cutbacks. These cutbacks could potentially establish a floor for lithium salt prices, allowing them to stabilize or even rebound as September progresses.

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