Why Battery Prices Fall In Year Of 2024?

1. Supply-demand imbalance in the raw materials market

Since the price of lithium carbonate touched a historical high of 600,000 yuan/ton in November 2022, its price trajectory has shown a significant downward trend. By October 2023, the spot price of lithium carbonate had fallen sharply to 150,000 yuan/ton, a change that seems particularly dramatic in just one year. This round of price decline is rooted in the supply-demand imbalance in the raw material market - the speed of capacity expansion far exceeds the growth rate of market demand.

According to industry analysis, this state of supply exceeding demand is expected to continue until 2024 and beyond. This is further corroborated by data from the Guangzhou Futures Exchange, showing that lithium carbonate futures prices are expected to hover around 130,000 yuan per ton in 2024, signaling a continuation of the downward price trend.

2: The excessive expansion of battery production capacity

At the same time, China's power battery industry is also facing the challenge of overcapacity. According to the data released by the China Automotive Power Battery Industry Alliance, in the first eight months of this year, the total output of power batteries reached 419.7GWh, however, the actual amount of loaded only 219.2GWh, loaded only 52%, and the overall capacity utilization rate of the automotive industry is basically the same.

Behind this phenomenon is the battery manufacturers sparing no effort in the capacity race. Taking industry giant CATL as an example, its capacity utilization rate in the first half of 2023 was only 60.5%, meaning that more than 100GWh of capacity was in an idle state, a staggering figure.

3. The market adjustment and future prospects

In the face of the continuous decline in raw material prices and serious overcapacity of batteries, the battery market will maintain a low price level for some time to come.

However, as the sales of new energy vehicles continue to grow, the market demand for batteries will also gradually pick up. Industry experts expect that to realize the balance of supply and demand in the battery market, at least until 2025. During this period, the battery industry will experience a round of profound reshuffling and reorganization, laying a solid foundation for future healthy.