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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 now exceeds 70%, after a rebound between March and April which quickly ran out, and many analysts today are convinced that the decline in prices will continue, at least in the second half of this year, if not for longer: a trend that is in some ways encouraging, given that it reduces 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 full electric vehicles increased by 10.6% worldwide: “a consistent increase on an annual basis, but a marked slowdown compared to the 26.9% growth rate of 2023”, observes Macquarie, while noting an acceleration in hybrid registrations.
Furthermore, about 90% of the increase for “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 in China will also slow down growth for Macquarie, which forecasts a +24.6% (from +30.2% in 2023).
