EV Battery prices drop 10% in August amidst dampened demand

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EV Battery prices drop 10% in August amidst dampened demand

EV Battery prices drop 10% in August amidst dampened demand

Industry News
Sep 12,23

As reported by market research firm TrendForce, the average price drop for cells used in EV batteries reached 10%, underscoring a lackluster growth trend in the EV battery market.

EV Battery prices drop 10% in August amidst dampened demand

Dampened demand for electric vehicles (EVs) has resulted in a 10% decrease in the prices of batteries utilised for both EVs and energy storage during August, as reported by market research firm TrendForce. They anticipate further price declines throughout the year.

This decline in EV battery prices may provide some relief to the industry, which has been grappling with a price war initiated by Tesla in January to stimulate demand.

During the pandemic, prices for battery materials surged to record highs, driven by increased EV demand facilitated by lower borrowing costs. However, prices have been steadily decreasing since then.

If the production of EVs continues to outpace demand, automakers might find themselves in a dilemma: either reducing prices and profit margins or slowing down assembly lines, further affecting the demand for batteries.

The research firm highlighted that the average price drop for cells used in EV batteries reached 10%, underscoring a lackluster growth trend in the EV battery market.

Prices for lithium iron phosphate (LFP) cells, commonly used in affordable EVs and energy storage, have also been on the decline. Although initially developed in the United States, China now dominates global LFP battery production.

Prices for batteries intended for energy storage have also seen a decrease due to weak demand outside of China, leading battery manufacturers to cut back on production in an attempt to stabilise prices.

TrendForce anticipates an inevitable price war in China's storage cell production sector due to overcapacity, with a continued gradual price decline expected for the remainder of the year.

Furthermore, consumer electronics such as smartphones and laptops, which also experienced a drop in demand from their pandemic-induced highs, rely on lithium-ion batteries similar to those used in EVs.

TrendForce noted that battery cell suppliers have been focused on reducing existing inventories due to poor demand for these devices in August.

Source: moneycontrol.com