Why Lithium Prices Are Experiencing A Global Decline

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A newly released report identifies the primary cause behind the global downturn in lithium prices as the slowdown in China’s demand for electric vehicles also referred to as EVs.

Benchmark Mineral Intelligence data reveals a staggering 80% drop in lithium prices over the past year, currently standing at $13,200 per ton, marking the lowest level since 2020.

The surplus of lithium has prompted considerations of potential reductions in electric vehicle (EV) prices, addressing challenges in competing with traditional gasoline powered vehicles.

Responding to this shift, prominent lithium suppliers like Australia and South America are actively exploring alternative business models to align with the changing dynamics of the market.

Beyond China: Factors Beyond a Slump Impacting Electric Vehicle Sales Growth

Despite the ongoing surge in global electric vehicle (EV) sales, the growth rate is experiencing a shift from ‘tremendous’ to ‘excellent’, as noted by a lithium sales executive in a MarketWatch report.

Analysts cited high worldwide interest rates, impacting the automotive sector, with EVs not immune to the effects.

The initial anticipation of EV price parity with gas-powered vehicles by 2025, as projected by The Guardian, faced delays due to COVID related factory closures and supply chain disruptions.

In response to consumer demands and challenges, major auto manufacturers like Ford and GM postponed the introduction of new EV models, contributing to an oversupply of lithium, according to the Global Automotive Trade Network, a Chinese analytics site focusing on car markets.

Chinese EV Makers Engage in Price War Amid Declining Demand and Looming Challenges for Smaller Players

As China experiences a year-on-year decline in electric vehicle (EV) demand, local EV manufacturers are currently embroiled in a “price war” to attract new customers. The combination of reduced lithium prices provides automakers with added flexibility to lower price tags, reported Chinese news site Car Quiz.

However, the intense competition among over a dozen EV makers has led to market saturation, and only a few companies can meet or surpass sales targets. Analysts anticipate potential struggles for smaller Chinese EV firms in 2024.

As major players such as China’s BYD attain unprecedented success, Elon Musk of Tesla voices apprehension that Chinese EV manufacturers, operating without trade barriers, could potentially significantly outperform most other global companies.

Argentina’s President Proposes Lithium Export Boost for Economic Recovery; Opposition Stems from Constitutional Ownership Divide

In an ambitious move to fortify Argentina’s economic recovery, recently elected President Javier Milei is advocating for a surge in exports of the nation’s significant lithium reserves, positioning Argentina as the fourth-largest lithium producer globally.

President Milei revealed that prominent figures, including Elon Musk, have shown substantial interest in Argentina’s lithium resources.

However, constitutional constraints, attributing natural resource ownership to provinces rather than the federal government, pose challenges.

Political adversaries, particularly the governor of the nation’s primary mining province, express strong opposition, vowing to resist any attempts by Milei to exploit lithium. The governor expressed – “He’ll have to come at me with the army.”

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