The global lithium battery market experienced a lackluster performance in January, with the average prices of various power battery cell products continuing to decline in China, according to a report by market research firm TrendForce.
Pouch-type automotive ternary power battery cells witnessed the most substantial decrease, dropping by 7.3 percent to RMB 0.51 yuan ($0.071) per Wh in January. TrendForce noted that the average price is anticipated to persist on a downward trend throughout February.
In January, the average price of prismatic ternary battery cells declined by 5.9 percent compared to the previous year, reaching RMB 0.48 per Wh. Similarly, prismatic lithium iron phosphate power battery cells experienced a 4.4 percent decrease to RMB 0.43 per Wh in the same period.
While lithium prices have currently stabilized, concerns arise regarding the potential slowdown in the growth of the electric vehicle market in 2024. Notably, Tesla, in its fourth-quarter earnings meeting, hinted at a reduction in its 2024 sales growth, contributing to market uncertainties, as outlined in the TrendForce report.
Amidst escalating market competition and a concerted effort by buyers to curtail costs, Chinese battery suppliers are expected to implement cost-cutting measures, potentially driving the price of power battery cells down to the RMB 0.3/Wh level, according to TrendForce. This move poses challenges for power battery cell manufacturers facing difficulties in securing upstream raw materials, with the overall average cell market price projected to continue its downward trajectory in the first quarter.
The energy storage cell sector, however, exhibited relative stability in market demand as the Chinese New Year approached, with prices remaining relatively steady. In January, energy storage battery prices recorded a 2.2 percent decrease to RMB 0.44/Wh.
A report by local media outlet 36kr on January 16 highlighted an intensifying price war for power batteries, notably involving CATL and BYD, the two largest battery makers globally. The shift from a state of tight supply to oversupply within a year has led to a gradual decline in prices, with rates now moving towards RMB 0.3/Wh, according to 36kr's report.