Prices of Chinese EV battery cells fell by 50% at end of 2023, says TrendForce

Average sales prices of Chinese power cells at the end of 2023 were half of what they were at the start of the year, according to TrendForce. Despite the drop, the research firm says prices should stabilize in the second half of 2024.

January 5, 2024 Angela Skujins

Image: volytica diagnostics GmbH

TrendForce statistics show that Chinese electric vehicle cell prices were down 50% in December 2023 compared to January 2023, with average sale prices for batteries falling by 10% in the final month of the year alone.

Square LFP battery cells suffered the biggest blow with a 10.1% price reduction in December, followed by Pouch NCM523 with 7% and Square NCM523 with 6.7%.

“A combination of lower-than-expected market demand and rapid capacity expansion led to oversupply and significant inventory build-up, evident since the third quarter of 2023,” TrendForce said in a press release. “Intense competition in the bidding process pushed centralized procurement prices (bulk orders negotiated on price) below CNY 0.40 ($0.06)/Wh, undercutting the production costs of some manufacturers.”

TrendForce said fewer market orders and suppliers’ need to stabilize cash flows led to the low-price strategies, with consumer demand also cooling in the final month of the year.

But as the electric vehicle market is projected to grow by up to 20% in 2024, and supply chain inventory also expected to normalize, lithium battery product stock levels and prices should return to normal in the second half of 2024, according to the company.

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