Are Rising Lithium Prices Hindering EV Revolution

Firstly, while these elements are costly, one must consider how much of each one truly goes into an EV battery.

FREMONT, CA : One of the primary principles of the idea that EVs will take over from internal combustion is the dropping cost of batteries. From a pack price of $1,200 per kWh in 2010, the prices had declined to $137 per kWh in the following decade and £132 per kWh in 2021. There was an anticipation of costs below $100 by 2023, by which point EVs would hit price parity with comparable internal combustion vehicles. But the global ripple in lithium prices has raised some questions about whether this goal is even feasible. Lithium carbonate prices had been falling since 2018 from around $15,000 per ton to half that price by the end of 2020. But due to the demand for EVs, the price has been rising all through 2021, now reaching over $40,000 per ton. This looks like an alarming situation because EV demand is only skyrocketing. Some experts are now stating that production can’t scale because lithium prices will fall, along with surging prices of other minerals. Cobalt price has gone from $30,000 in 2020 to $80,000 per ton today. A similar situation is with Nickel's price, which has surged even more, from $20,000 to $80,000 per ton. These rising demands for Lithium-Ion batteries appear terminal for the price deductions and volume growth in the global semiconductor arena witnessed in the last couple of years. However, there are a few other aspects to take into consideration. 

Firstly, while these elements are costly, one must consider how much of each one truly goes into an EV battery. Over half of the price of an EV battery comes from the minerals in the cathode, with 12% from the graphite in the anode. The popular NMC cathode type uses lithium, nickel, manganese, and cobalt for the anode. As mentioned, the prices of nickel and cobalt have increased alongside lithium, but the price of manganese hasn’t increased to the same level.

The surge in the cost of lithium and other minerals used in electric vehicle batteries is a problem. Just as the switch to EVs is part of the solution to the issue of rising CO2 emissions and climate crisis, technological innovation will drive the future of EV batteries.