China’s lead-acid battery industry is being pressured to keep battery prices stable amid growing material cost increases.
As rumours spill out of China that the country’s lithium-ion battery makers might be dropping their prices by up to 40%, an industry source in China said this would be impossible for lead-acid manufacturers.
Rising lead prices in the country was cited as a reason lead-acid battery manufacturers are finding it ‘difficult to maintain’ their margins.
A spokesman from a leading lead-acid battery making firm told BBB: “The gross profit rate of the whole Chinese VRLA battery industry is around 20%, and the lead price has risen continually since the fourth quarter of last year to about CNY19000/T ($2,770).
“Therefore, the theory of cutting prices by more than 30% can’t work.
“Businesses are under a lot of difficulties to maintain but not increase the price of battery.”
China’s desire to cut lithium-ion battery prices by 35%-40% in 2017, was noted by financial investment website Barron’s Asia.
The rumours of lithium-ion price cuts come as China’s government effectively put sanctions on some lithium-ion battery makers from outside the country.
Last week BBB reported how vehicle OEM Hyundai Motor was looking to China for lithium-ion batteries after its South Korean battery supplier was omitted from a list of vendors permitted to provide batteries for electric cars in China.