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TrendForce: EV Battery Prices Down 4–7% in January

In January, the global lithium battery market maintained a subdued stance, as cell manufacturers continued to navigate their inventories while production rates remained stagnant at lower levels.

January Insights: Global Lithium Battery Market Trends and Forecasts

The global lithium battery market experienced subdued activity in January, with cell manufacturers still working through their inventories and production rates remaining low, as per the latest research from TrendForce. The average selling price (ASP) of electric vehicle (EV) cells continued to decline, with the most notable decrease observed in EV pouch cells, which saw a month-on-month (MoM) drop of 7.3% to CNY0.51/Wh.

Although prices are anticipated to continue falling in February, the pace of decline is expected to moderate.

In the Energy Storage System (ESS) sector, market demand showed no significant fluctuations. Despite the production rate for ESS cells not matching that of EV cells, prices remained relatively steady, with a MoM decline of 2.2% to CNY0.44/Wh.

January saw weak demand for consumer cells, compounded by a continuous decrease in the price of lithium cobalt oxide and a 7.4% MoM decline in cathode prices. Consequently, there was a slight reduction in the cost of LCO cells in January, with a MoM decrease of 5.9% to CNY5.43/Ah.

Navigating the Currents: Insights into the Global Lithium Battery Market

As we delve into January’s dynamics, the global lithium battery market is characterized by a delicate balance. With the Chinese New Year on the horizon, a semblance of stability has returned to the pricing of raw materials. Amidst this, a minor resurgence in lithium prices has been witnessed, albeit modest, driven by small-scale rigid demand replenishment among raw material suppliers. Meanwhile, cobalt prices have largely held steady, contributing to the overall market equilibrium.

Nevertheless, the road to recovery appears to be paved with caution signs as downstream demand struggles to regain its pre-pandemic momentum. Despite the tentative uptick in raw material prices, the impetus for sustained growth remains subdued. Consequently, the forecast for consumer cell prices in February leans towards stability rather than significant fluctuations.

TrendForce’s analysis underscores the stabilization of lithium salt prices, yet a shadow of uncertainty looms over the EV market’s growth trajectory for 2024. Tesla’s insights, shared during their fourth-quarter earnings call, hint at a tempered outlook for sales expansion this year, hinting at potential headwinds for the industry’s growth trajectory.

Strategies and Challenges: Chinese Battery Suppliers' Race to Lower EV Cell Prices

In response to mounting competitive pressures and the relentless pursuit of cost efficiencies by buyers, Chinese battery suppliers are poised to embark on aggressive cost-cutting initiatives. Their objective? To drive down EV cell prices to a projected CNY0.3/Wh by 2024. However, this ambitious strategy may pose operational hurdles for suppliers grappling with raw material procurement challenges.

Amidst these shifts, the overarching narrative points towards a marginal decline in the overall market average price of battery cells in the inaugural quarter of the year. As stakeholders navigate this landscape, adaptability and strategic foresight will be pivotal in navigating the evolving dynamics of the lithium battery market.


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