Demand for Battery Cells Remains Poor due to Sluggish NEV Market

SHANGHAI, Feb 7 (SMM) - After the 2023 Chinese New Year (CNY) holiday, the end demand for battery cell still remained sluggish. In particular, the demand from NEV market that used to be robust became weak this year after the removal of NEV subsidies.

According to data released by some car companies, the sales of more than 20 car makers such as BYD and Chery all fell sharply in January, with an average decline of more than 40%. Among them, the sales of SAIC-GM-Wuling in January tumbled by 91% from the previous month to 4,477 vehicles. The sales of other car companies like Leap Motor and Chery also fell by more than 60%.

In final analysis, the removal of NEV subsidies at the end of last year advanced the purchasing demand, thus the sales in January weakened.

In addition, when Tesla's sharp price cut forced some other car companies to follow suit, consumers were inclined to hold back from purchasing.

However, the car companies still need to digest the inventories of raw materials and finished products they have stocked before. Therefore, both production and sales of the power battery cells in January declined significantly, and failed to pick up after the CNY holiday.