The electric vehicle (EV) battery market, energy storage sector, and consumer electronics industry are facing significant challenges due to insufficient downstream demand, according to a recent report by TrendForce. The research reveals a notable decline in average selling prices (ASPs) and production adjustments in these crucial markets.
EV Battery Market Faces Pricing Pressures: The ASP of EV cells in China experienced a sharp decline in August, dropping below CNY 0.6/Wh. This trend is particularly pronounced in various categories of EV batteries, with square ternary cells, LFP cells, and pouch ternary power cells seeing average price drops of 10 percent. Their respective prices were recorded at CNY 0.65/Wh, CNY 0.59/Wh, and CNY 0.7/Wh. These developments highlight a concerning stagnation in the growth of the EV battery market, primarily attributed to weak demand.
Energy Storage Market Experiences Setback: Expectations for a robust August demand in the energy storage market were thwarted, partly due to weakened overseas demand. This slowdown compelled battery manufacturers to scale back production, resulting in energy storage cell prices falling below CNY 0.6/Wh. This surplus in China’s energy storage cell production capacity has raised concerns about an imminent price war. Experts predict a continued gradual decline in prices for the remainder of the year if market conditions do not improve.
Consumer Electronics Demand Slumps: Consumer electronics also encountered sluggish demand in August, leading battery cell suppliers to focus on liquidating existing inventories. TrendForce’s report notes an ongoing drop in the prices of key materials such as lithium salts and cobalt [II, III] oxide. This price decline shows no signs of stabilizing, causing manufacturers to adopt a cautious “business as usual” approach to production. As a result, a downward trajectory of LCO (lithium cobalt oxide) battery prices is anticipated throughout September.
The challenges faced by these industries underscore the interconnectedness of various sectors in the global supply chain and the impacts of economic fluctuations. Industry stakeholders are closely monitoring market developments and are preparing to adapt to evolving conditions in the coming months.