EV battery prices fell by 50% at end of 2023, says TrendForce

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.