The price of lithium is an important factor to consider in the production cost of electric car batteries, and any significant change in its price can have an impact on the final price of these vehicles.
As the demand for electric cars has been increasing in recent years, so has the demand for lithium. This, together with other factors, has led to a rise in the lithium pricewhich has directly affected the production cost of batteries and, therefore, the final price of electric cars.
Due to the importance of lithium in the battery production, any significant change in the price of this metal can have an impact on the cost of production of electric vehicles. If the price of lithium increases, the cost of producing batteries will increase, which in turn will increase the price of electric cars.
And, while it is true that the price of lithium is not the only factor that influences the cost of producing batteries, it is no less true that lithium is a key component in the production of these. And that, in addition, the batteries suppose the main reason for cost overrun of an electric vehicle.
Lithium price plummets
As a result of the latest movements in the market, there is the possibility that electric vehicles will be more economical in the future, as a significant decline in lithium prices since the beginning of this year is confirmed.
In accordance with Benchmark Mineral IntelligenceAfter rising for two years, the price of lithium carbonate, a key ingredient in electric vehicle batteries, has decreased more than 65% since January.
Mining industry analyst Jean-Charles Cachon notes that prices peaked at more than $85,000 in November, a level he considered “unsustainable.” And so it has been, because currently the metric ton of lithium salt is already paid at 30,000 dollars.
An important factor has been the removal of subsidies for the purchase of electric vehicles in China, which has caused a drop in demand and, therefore, a drastic drop in lithium prices. And not only lithium, but also other critical metals for the manufacture of batteries such as cobalt and nickel.
cheapest electric cars
According to Daniel BretonCEO of Electric Mobility Canada, this recession could be a positive for consumers, especially when it comes to electric vehicle adoption.
Breton points out that as the costs of minerals essential for battery production fall and battery manufacturing becomes more entrenched in the industry, we will see more electric vehicles available on the market for prices that range between 25,000 and 40,000 Canadian dollars (between 17,000 and 27,000 euros).
In this way, access to this technology will be more accessible and affordable for the general population. Breton’s perspective is encouraging, as he indicates that the production and adoption of electric vehicles can be a sustainable solution for transport in the near future.
For its part, the mining industry is not concerned and claims to be used to the ups and downs in mineral prices.
Despite the price decline, Trevor Walker, chief executive of junior miner Frontier Lithium, notes that lithium salt production is still still very profitableas it only costs about $9,500 per metric ton, well below current market prices.
In addition, battery-grade mineral prices remain high enough to motivate industry players to push ahead with new projects, Walker concludes.
Source | CBC
