TrendForce’s latest research reveals that China's EV sales continued to grow throughout November 2024, driving demand for EV batteries. LFP battery prices remained stable, while prices for ternary batteries saw a slight decline.
The ESS market maintained strong seasonal demand, with an increase in shipments of large-capacity batteries due to their cost advantages. However, as year-end orders tapered off, the ASP for energy storage batteries continued to decline.
TrendForce notes that LFP batteries continue to gain a larger share of EV installations. While LFP cathode material prices rebounded slightly in November, the impact on the overall cost of EV batteries was minimal, keeping LFP battery prices stable. In contrast, demand for ternary EV batteries fell behind that of LFP batteries. Coupled with the continued decline in ternary material prices, the price of ternary batteries dropped by approximately 2% compared to the previous month.
The demand for ESS batteries was driven by China's end-of-year rush to connect energy storage systems to the grid, as well as strong overseas demand for grid-scale energy storage projects. Despite a slight rebound in LFP cathode material prices in November, the impact on energy storage battery costs was minimal.
Large-capacity batteries (above 300Ah, with 314Ah being the mainstream model) saw a rapid increase in shipment share due to their superior cost-efficiency. This shift aligns with the upstream and downstream industry's focus on reducing costs and improving efficiency. It is projected that large-capacity batteries will account for over 40% of total shipments in 2024, contributing to a continued decline in the ASP of ESS batteries in November.
Looking ahead to December, with year-end grid-connection projects in China nearing completion, the growth in orders is slowing, and battery prices are expected to stabilize in the short term.
TrendForce noted that battery demand in the second half of 2024 exceeded expectations, prompting upstream manufacturers to maintain high production rates. However, the price war that began in 2023 due to an oversupply of battery materials has persisted into 2024. Prices of upstream materials such as LFP cathodes, lithium battery (LiB) copper foil, and lithium hexafluorophosphate continue to decline, significantly impacting supplier profitability.
The LiB materials industry, which faces long-term losses and a highly concentrated market structure, may see relief in 2025. To stabilize the supply chain, first-tier battery manufacturers are expected to reserve room for price increases in next year’s orders. This move could support material suppliers’ efforts to achieve higher prices.
TrendForce forecasts that some LiB materials could see slight price increases during the 2025 peak season, which may help offset the heavy losses experienced by material suppliers in recent years. However, since the supply-demand balance has yet to shift from oversupply to shortage, any price increases will likely be limited. Combined with battery manufacturers' aggressive cost-control measures, battery cell prices in 2025 are expected to remain largely stable.
