Listen to the audio version of the article
White gold has stopped shining as it once did. The prices of lithium – a metal used in batteries – are actually in free fall, depressed by excess production accompanied by a (albeit relative) slowdown in demand. Lithium carbonate in particular is trading below $13,000 per ton, lithium hydroxide is approaching $12,000: levels they haven’t fallen to since July 2021, almost three years ago.
The decline in the last twelve months has now exceeded 70%, after a rebound between March and April that quickly ran out of steam, and many analysts are now convinced that the fall in prices will continue, at least in the second half of this year, if not longer: a trend that is encouraging in some ways, given that it is reducing the cost of a raw material that is essential for the energy transition.
Among the causes of the collapse, however, there is also the growing pessimism about the pace of the decarbonization process and in particular about the spread of the electric car, which – especially in Europe and the United States – disappoints the resounding forecasts that were circulating until recently. Many Western car manufacturers are scaling back their production development plans and agreements for the supply of batteries. BMW, for example, has just canceled a $2 billion order for cells with Northvolt.
In the first four months of this year, sales of fully electric vehicles increased by 10.6% worldwide: “a significant increase on an annual basis, but a marked slowdown compared to the 26.9% growth rate in 2023”, notes Macquarie, although it noted an acceleration in hybrid registrations.
Furthermore, around 90% of the increase in “pure” electric cars occurred in China: a country where “the market is now becoming mature, with a penetration rate of 67.9% in large cities in 2023 and a national average of 35.7%”. Ergo: new registrations also in China will slow down growth for Macquarie, which forecasts +24.6% (from +30.2% in 2023).
