Battery production demand has doubled in China, and a sharp price drop is anticipated this year.
Battery production demand has doubled in China, and a sharp price drop is anticipated this year.
China has started a competition to become the industry leader in the manufacture of batteries for electric vehicles in recent years. A project that has made it possible to create thousands of new installations. The issue is that supply has significantly outpaced demand, endangering the sustainability of several projects while simultaneously resulting in a sharp decline in prices by 2024.
There are forecasts of a downturn in the Chinese market for electric cars, which will expand but will be considerably slower than in past years, in addition to the lithium carbonate price crash of 77% last year.
In 2024, registrations are anticipated to rise by 25% to 9.4 million units, a long cry from the 89% growth between 2021 and 2022.
In addition, output capacity was 747 GWh at the end of 2023, while demand was still 387 GWh. A feature that results in a twofold increase in domestic demand for lithium battery manufacture.
This will intensify competitiveness between the various firms, who want to convert red figures into profits by 2025 following a phase of capital expenditures on new facilities.
According to Chinese analysts, the outcome will be a drop in lithium battery prices in China of between 10% and 15% in 2024. That would allow electric vehicle makers to access cheaper manufacturing costs and provide more competitive offers in the economic domain.
Another effect will be that Chinese producers of batteries and electric vehicles will have to open up new markets to offset their surplus output abroad by offering more technologically advanced products at ever-lower rates.
Source- SCMP
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