Battery prices had been falling for more than a decade before turning higher in 2022.
But the price of lithium carbonate peaked at 597,500 yuan (US$86,832.05) per tonne in China in November. It has since fallen to 425,000 yuan a tonne, down almost 30 per cent from the peak.
It was not immediately clear whether CATL would follow its offer of discounts to Chinese automakers with similar proposals for its growing roster of customers outside China, a group that includes BMW and Ford.
China ended a more than decade-long national subsidy for EV purchases at the beginning of this year. Shortly after, automakers including Tesla began to offer discounts to spur demand and defend share in the world’s largest EV market.
Tesla slashed prices of its best-selling Model 3 and Model Y cars by up to 14 per cent in January, starting what analysts called a price war in China’s EV market with Xpeng and Huawei-backed Seres following Tesla’s lead.
Sales of new energy cars, a category including both pure electric cars and plug-in hybrids, fell 6.3 per cent in January after growth of 90 per cent in 2022, according to the China Passenger Car Association.
CATL has faced calls from its customers in China, most which are still loss-making, to bring prices down and accept a lower profit margin in exchange for more sales.
The gross profit margin for CATL’s EV battery products was 15 per cent in the first half of 2022, 8 per cent lower than the same period a year ago.