The Average Selling Price (ASP) of Chinese EV cells registered a notable decrease of 6–10 percent in December, 2023, according to TrendForce.
EV square ternary cells, LFP cells, and pouch ternary power cells saw their prices plummet to CNY 0.51/Wh, CNY 0.45/Wh, and CNY 0.55/Wh, respectively.
Throughout December, the EV battery market remained steadfast in its pursuit of inventory reduction, causing a continued decline in cell demand. This strategy, driven by a combination of insufficient market orders and suppliers’ endeavors to stabilize cash flow, triggered widespread adoption of low-price sales tactics. Consequently, prices across various product categories experienced a consistent downward trend.
In the ESS cell sector, oversupply and substantial inventory accumulation became prominent due to lower-than-anticipated market demand and rapid capacity expansion since the third quarter of 2023. This led to Chinese ESS cell ASP plunging to CNY 0.45/Wh in December, marking a monthly decline of approximately 4 percent. Additionally, intense competition in centralized procurement further pressured prices below CNY 0.40/Wh, undercutting production costs for some manufacturers.
Meanwhile, in the consumer cell segment, declining demand prompted cell manufacturers to sell inventory at reduced prices to actively diminish stock, thereby maintaining low operating rates. LCO cell ASP saw an approximate 8 percent decrease, reaching CNY 5.77/Ah. The continuous drop in raw material lithium carbonate prices also contributed to the downward trajectory of LCO cell costs. While cell prices are anticipated to continue declining in January due to off-season demand in 1Q24, the decrease in consumer cell prices might slow down slightly due to a recent uptick in cobalt raw material prices.
TrendForce highlighted that the Li-ion battery industry, experiencing a surge in capacity release in 2023, entered an oversupply cycle due to a slowdown in end demand. This oversupply led to a substantial reduction in lithium battery raw material prices, with lithium carbonate prices falling below CNY 100,000/ton by the end of 2023, contributing to continuous declines in cell material costs.
From the beginning of 2023 until December, power cell ASPs dropped by over 50 percent. Despite projections of continued growth in the EV battery market in 2024, estimated at an annual rate of 15-20 percent, expectations suggest that as inventory normalizes across the supply chain, levels will gradually return to equilibrium by the second quarter, stabilizing lithium battery product prices.