China’s EV Battery Market Rebounds with Stability: TrendForce Analysis

By Editor


China’s electric vehicle (EV) battery market has experienced a resurgence of stability in prices since February, according to the latest analysis by TrendForce.

March witnessed a significant rebound in battery-grade lithium carbonate prices, exceeding milestones of CNY 100,000 and 110,000 per ton, before experiencing a slight retreat by month-end. Despite this retreat, the market saw a remarkable 14 percent increase in average prices for the month, providing a solid footing for EV battery prices to remain steady.

The upward trend in raw material costs has contributed to the stabilization of EV battery prices across various types. Square ternary, square LFP, and pouch-type ternary EV batteries recorded average prices of CNY 0.48/Wh, 0.42/Wh, and 0.50/Wh, respectively, showcasing notable stability in the market.

In contrast, the energy storage system (ESS) battery sector experienced a slower recovery in demand during March, with certain companies scaling up production while overall sentiment remained cautious. The average price of LFP ESS batteries saw a slight 2 percent dip to CNY 0.42/Wh, attributed to market oversupply. The emergence of large-capacity ESS batteries exceeding 280 Ah, known for their competitive pricing, indicates a trend toward further price reductions.

Meanwhile, consumer batteries witnessed a 4 percent price increase in March to CNY 5.61 per ampere-hour (Ah), driven by a revival in key metal prices like lithium and cobalt. However, the potential for further price hikes in these metals seems limited, raising doubts about sustained recovery in consumer battery prices, with predictions leaning towards stabilization in April.

TrendForce underscores a significant shift in 2024, with raw material prices halving compared to early 2023. As core material costs approach marginal levels for businesses, there’s an anticipated phase-out of higher-cost capacities to address overcapacity issues and stabilize supply-demand dynamics.

Despite a production cutback on the supply side and a modest rebound in lithium prices by the end of Q1, persistent overcapacity and a gradual demand resurgence suggest that the supply side can swiftly recover through enhanced capacity utilization, limiting the potential for significant lithium price recovery.

Looking ahead to Q2, TrendForce predicts a limited range for lithium price fluctuations amid heightened competition and price wars in the EV battery market. Leading suppliers are driving battery prices below the CNY 0.4/Wh threshold to capture greater market share, indicating a trend towards more pronounced price drops for EV batteries. Consequently, a slight downtrend in overall battery prices is projected for the second quarter. News Desk

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