Battery cell prices continue to plummet as lithium prices hit new low

The analysis from Taipei-based intelligence provider TrendForce finds that the average price for lithium iron phosphate (LFP) energy storage system cells was CNY 0.41/Wh ($ 0.056/Wh) in June, posing a challenge to cost control for most cell makers.
Image: JinkoSolar

Battery costs are rapidly falling, mirroring the decline of raw material prices, and many cell makers are already grappling with losses.

According to market analyst TrendForce, June saw a significant drop in lithium prices due to a focus on inventory reduction in the downstream battery sector.

Weak demand for lithium salts and sluggish shipments of lithium carbonate—compounded by short-term oversupply—pushed lithium carbonate prices to a new low for the year. Prices fell from over CNY 100,000 ($13.756) per ton last month to the range of CNY 90,000 per ton.

In the energy storage system (ESS) sector, a decline in battery cell orders following the mid-year peak in grid-connected installations in China combined with falling lithium carbonate prices have led to price decreases, TrendForce reports.

In June, the average price for LFP ESS cells was CNY 0.41/Wh (which translates to $56/kWh)—down 4.2% from May.

The analysts indicate that competition in ESS cell pricing remains intense, with cell and system makers adopting low-price strategies to secure orders. “This has pushed current prices of ESS cells and systems below the cost range for most cells makers and poses a significant challenge to cost control,” TrendForce says.

Major cell makers are now competing in the 300 Ah+ large-capacity cell product segment and by Q2 2024, most mainstream suppliers are expected to begin mass production of 300 Ah+ cells, which could potentially lead to further cost reductions.

Meanwhile, EV battery cells have experienced a sustained decrease. TrendForce’s survey indicates that in June, EV battery cell prices fell by 1-2% compared to May. Average prices in June for square ternary, square LFP, and pouch ternary EV battery cells were CNY 0.49/Wh, 0.42/Wh, and 0.51/Wh, respectively.

TrendForce notes that the lithium battery market experienced a peak season from March to May. In July, market demand is expected to remain weak, with lithium prices falling to the sensitive range of CNY 80,000–90,000 per ton.

Both EV and ESS cell prices are expected to face downward pressure at the beginning of the third quarter. “Stability or a rebound in battery prices will depend on restocking demand during the peak season at the end of the third quarter,” TrendForce reports.

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  • Marija has years of experience in a news agency environment and writing for print and online publications. She took over as the editor of pv magazine Australia in 2018 and helped establish its online presence over a two-year period.

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