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Powering Up for Less: Lithium Price Plunge Points to Affordable Electric Vehicles Ahead
Powering Up for Less: Lithium Price Plunge Points to Affordable Electric Vehicles Ahead

Powering Up for Less: Lithium Price Plunge Points to Affordable Electric Vehicles Ahead

  • 18-Apr-2023 4:13 PM
  • Journalist: Emilia Jackson

China: Cheaper electric vehicles (EVs) may be on the horizon due to a considerable drop in Lithium prices since the start of the year. After two years of soaring prices, the cost of Lithium carbonate, a crucial component in EV batteries, has decreased by over 65% since January.

In November, prices reached their peak at more than $85,000 US, but today, a metric tonne of battery-grade Lithium salt is available for less than $30,000 US. Additionally, China's decision to remove subsidies for electric cars has resulted in sluggish sales and reduced demand for these eco-friendly vehicles.

In January of this year, there was a significant drop in demand for Chinese Lithium, causing a state of panic. Prices, which were once more than ten times the production cost, plummeted as a result. The decline in prices is not limited to Lithium, either. Metals such as Cobalt and Nickel, which are also used for batteries, have seen price decreases as well. As a result of the falling costs of critical minerals, electric vehicles priced from $25,000 to $40,000 are becoming more common. This is partly due to the increased production of batteries in the industry.

As a result of lower prices, mining companies around the world are facing shrinking profit margins. In recent weeks, the downward trend in prices has caused some mining companies' shares to decline.

According to recent reports, the production of Lithium salts is costing just $9,000 to $10,000 US per metric tonne, significantly lower than current market prices. While there may be some fear and fluctuation in the market, current producers are still profiting. The high prices of battery-grade minerals are motivating industry players of all sizes to pursue new projects, despite any potential challenges.

The Canadian federal government estimates that there are approximately 3.2 million tonnes of Lithium oxides available across various deposits in the country. As a result, the demand for Lithium salts is expected to grow, especially as Ontario's auto sector begins producing electric vehicles and batteries soon. Although still in the pre-production stage, the hope is that suppliers can eventually provide car manufacturers with the necessary materials.

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