TrendForce reports that China’s EV battery market is undergoing a period of turbulence due to an overall lack of demand. Battery suppliers are reportedly reluctant to replenish their inventories and are instead, focusing on depleting existing stocks. This has resulted in insufficient demand to support the prices of upstream lithium materials, leading to a continuous decline in ASP.
As of October, the ASP of power cells in China has continued its downward trajectory, although the rate of decline has somewhat stabilized compared to August and September. Specifically, EV batteries saw a 2% price reduction, consumer LCO batteries decreased by 1.3%, and energy storage cells experienced the most significant drop at 3.3%.
Sustained weak demand in both EV and energy storage sectors has caused battery suppliers to slow down their raw material procurement. With the traditional peak season now behind us, any significant improvement in demand before the end of the year seems unlikely. This situation is expected to increase the difficulty for midstream and downstream firms in depleting their inventories and delaying the time required for inventory adjustments. Upstream companies are advised to adjust their production capacities promptly to prevent excessive stockpiling, which could lead to intensified price wars.
In the energy storage sector, the market witnessed a noticeable contraction in order volumes in October, primarily due to a decline in demand from overseas markets. This has disrupted export orders for battery suppliers, resulting in increased industry inventory levels and fierce competition in battery pricing. The average price of LFP cells dropped to CNY 0.5/Wh, with the lowest prices nearing CNY 0.4/Wh. It is expected that prices of energy storage cells will continue to fall in November due to the current high inventory levels and reduced end-user demand.
Consumer electronics saw a slight demand recovery in October. The launch of new products has breathed some life back into the market and provided a boost to digital consumer end-products. Additionally, a slight increase in the price of cobalt has lent some support to battery costs. However, this has not been enough to offset the pressure from the simultaneous drop in the prices of lithium carbonate and other raw materials, resulting in a continued decline in the price of LCO batteries in October. The rate of decline has slowed to 1.3%, with expectations for prices to stabilize in November.
Looking ahead to 2024, the Chinese NEV market is expected to maintain strong growth resilience, with further growth anticipated in the EV markets in Europe and North America—particularly in the US where the EV penetration rate is still below 10%. It is expected that in the short term, the US market will continue to rely on the Chinese supply chain given Europe’s slow progress in localizing its EV battery industry and the dominance of Japanese and Korean battery suppliers in the US market. Consequently, Chinese li-ion battery exports are projected to perform well in 2024. However, the ongoing release of new production capacity and scaling up in the Chinese li-ion battery industry in 2023 is expected to lead to overcapacity—extending into 2024—with EV battery prices anticipated to continue their slow decline.
For more information on reports and market data from TrendForce’s Department of Green Energy Research, please click here, or email the Sales Department at
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at