In November, the sales of the power battery industry chain remained strong during the peak season.

From downstream car market data, according to the data released by the China Association of Automobile Manufacturers, the production and sales of new energy vehicles exceeded 1 million for the first time in November, with year-on-year growth of 39.2% and 30%. In November, the market share of new energy vehicles also reached 34.5%.

Compared to the market performance of the new energy vehicle market, the new energy vehicle market saw further growth in November. Feedback to the upstream of the industrial chain has further driven the increase in installed capacity of power batteries.

Market data shows that the installed capacity of power batteries in China reached 44.9GWh in November, a year-on-year increase of 31%.

Based on the operation of the lithium battery industry in the fourth quarter:

In terms of raw material prices, the price of lithium carbonate has dropped by more than 30% since November, linked to a decrease in prices of materials such as lithium hexafluorophosphate, lithium iron phosphate, and ternary cathode. As of December 14th, the spot price of lithium carbonate was reported at 110000 yuan/ton, and the lithium carbonate futures LC2401 was reported at 100000 yuan/ton.

In terms of inventory, since the beginning of this year, manufacturers of materials and battery cells have been continuously destocking since the second quarter, especially top lithium battery companies, whose inventory levels are now mostly one month or even lower.

In the downstream car market, according to the November "Automobile Dealer Inventory" survey released by the China Association of Automobile Dealers, the comprehensive inventory coefficient of automobile dealers in November was 1.43, a month on month decrease of 15.9% and a year-on-year decrease of 23.9%. The inventory level in the downstream car market has fallen below the boom bust line.

It can be said that in 2023, after the continuous destocking of the entire power battery industry chain and the continuous recovery of market demand in the third and fourth quarters, the industry's inventory level has gradually recovered to a healthy level. In addition, the power battery industry chain enterprises have basically maintained a cautious inventory and demand strategy, and the low inventory and high turnover models have continued, laying the foundation for the stable operation of the power battery industry chain in the first quarter of 2024.

However, it is worth noting the market impact caused by overcapacity in the industry and the need to release production capacity.

According to incomplete statistics, the planned production capacity of major lithium battery main materials and battery cell manufacturers has exceeded the market demand of 2025. In addition, some enterprises are accelerating their capacity ramp up and release to improve their scale and cost reduction capabilities, adapt to market competition. At the 2023 High Tech Lithium Battery Annual Conference, leaders of several leading lithium battery companies stated that in the context of overcapacity, the industry's internal competition will continue in 2024, and the competition for orders and price wars in the industry will also continue.

According to the understanding of Gaogong Lithium Battery, the current trend of price reduction in the industry has quietly spread. On the battery cell side, some industry insiders have revealed to Gaogong Lithium Battery that the price of A-grade battery cells from some large battery cell manufacturers has dropped to 0.3 yuan/Wh. From the price reduction products released by some large battery manufacturers, it can be seen that many of them are cascading utilization of battery cells.

This also shows that the industry price war is sweeping through, and while the market is accelerating the structural clearance of production capacity, leading battery cell manufacturers are also accelerating the clearance of structural production capacity.