Slowdown in Chinese eV market leads to price decline for lithium and cobalt
Prices for metals used in electric vehicles (EVs) are falling as the demand for EVs slows in China, the largest EV market.
The price drop for materials like lithium, cobalt, and nickel is expected to continue due to increased production. This could lead to lower prices for EVs, potentially speeding up their adoption.
Lithium carbonate, a benchmark for lithium prices, has significantly declined.
In April, the average price was 177,500 yuan (US$24,500) per tonne, the lowest in 19 months and down 69% from the peak in November 2022.
Cobalt prices have also decreased, reaching the lowest level since August 2020 at around US$15.25 per pound.
This is down 62% from the peak in May 2022. Nickel futures have similarly dropped, closing at $20,305 a tonne for three-month contracts, a 63% decrease from the record high in March 2022.
The surge in battery metal prices happened in 2021 due to the expected demand for EVs.
However, Chinese production of new energy vehicles (NEVs) slowed, impacting the demand for battery materials.
The expiration of EV subsidies in China and the adoption of cobalt and nickel-free lithium iron phosphate batteries contributed to the price decline.
While lower prices could make EVs more affordable and drive adoption, long-term projections show a significant increase in demand for lithium.
The International Energy Agency predicts a 13-fold increase in lithium demand by 2050 if net-zero emissions goals are met.
According to the agency’s estimates, cobalt prices are expected to triple, and nickel prices will double.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief