Cheaper Batteries to Help China EV Makers' Margins But Price War Not Over -- Market Talk

Dow Jones2023-05-09

0630 GMT - Cheaper batteries may help reduce margin pressures for Chinese new-energy vehicle companies in the coming quarters, but fierce competition due to their aggressive sales targets may delay improvements in profitability, says Fitch Ratings. It forecasts moderate 30%-40% growth in the domestic NEV market this year. Domestic prices of battery-grade lithium carbonates declined to around CNY180,000 at end-April from CNY400,000 a tonne in 1Q, it notes. However, the risk of intense rivalries for market share remains as BYD and most NEV carmakers have set 2023 growth targets above 60%, Fitch says. While loss-making independent NEV producers may resist further price competition, market leaders such as Tesla and BYD have the pricing flexibility to balance demand and supply and may continue to expand production capacity aggressively in 2023, Fitch adds. (monica.gupta@wsj.com)

(END) Dow Jones Newswires

May 09, 2023 02:31 ET (06:31 GMT)

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