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In December, the EV battery market implemented inventory reduction, causing a drop in cell demand. Widespread low-price sales strategies, driven by both a lack of market orders and suppliers’ cash flow concerns, led to continuous price declines. Chinese EV cell ASP witnessed a 6–10% decrease, with square ternary cells, LFP cells, and pouch ternary power cells dropping to CNY 0.51/Wh, CNY 0.45/Wh, and CNY 0.55/Wh, respectively.
In the ESS cell sector, oversupply from lower-than-expected demand and rapid capacity expansion resulted in inventory build-up, leading to a 4% monthly decline in Chinese ESS cell ASP to CNY 0.45/Wh in December. Intense competition pushed centralized procurement prices below CNY 0.40/Wh, undercutting some manufacturers’ production costs.
The consumer cell segment saw reduced demand in December, prompting manufacturers to sell inventory at low prices to reduce stock. LCO cell ASP dropped by about 8% to CNY 5.77/Ah. Despite an anticipated continued decline in cell prices in January, a slight increase in cobalt raw material prices might slow down the drop.
In 2023, the Li-ion battery industry faced oversupply due to slowing end demand, causing a significant reduction in lithium battery raw material prices. By December, lithium carbonate prices fell below CNY 100,000/ton, contributing to decreasing cell material costs.
By December, the ASP of power cells had fallen by over 50% compared to the beginning of 2023. The EV battery market is expected to grow in 2024 with a 15-20% annual growth rate. As supply chain inventory normalizes, healthy stock levels are projected to return by Q2, stabilizing lithium battery product prices. |
