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Lithium increased by 900% in just two years and is expected to continue rising. Studies indicate that the price of the material can impact the future of electric cars.
O Lithium it is not a rare material, however its production is complicated, being a real problem when you want to electrify a large part of the automobile industry. The price rose to absurd levels a few years ago and the drop forecasts are not encouraging for the future of electric cars. According to estimates from the Benchmark Mineral Intelligence, the increase in the price of lithium has been 900% since January 2020.
Increase in demand for electric cars impact Lithium price
According to market analyses, in just over two years the price of lithium increased due to the greater demand for electric vehicles in the world market, whose sales continue to increase month after month.
China's government has forced companies to stop mining due to the low hydroelectric power output that has been generated in recent months.
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Benchmark points out that the case will not change in the short term, and could impact the future of electric cars. His calculations show that the demand for lithium batteries will still increase by 36%, but that the production of the material will still be expanded by 33%.
Pressure from transition to electric cars adds to lithium price
As the global supply of lithium is already insufficient, the numbers indicate that it will intensify soon, impacting the future of electric cars. At the same time, Europe is putting pressure on the vehicle industry to apply changes and make the transition with a focus on a more sustainable segment.
From 2035, automakers will no longer be able to market polluting vehicles and, before that, the European emissions regulation Euro 7 will push for the road to be already trodden and electric or highly electrified cars to be more than usual on the streets.
The global context is generating a struggle to obtain enough lithium to expand battery production and eletric cars. Manufacturers are striking key deals to secure the lithium produced in some mines.
Exclusivity agreements reduce the supply of available lithium
Volkswagen and Mercedes have taken positions in Canada, where there is an untapped source of lithium. The problem, according to information from Benchmark and Cleantechnica, is that these decisions only put more pressure on the market.
The exclusivity agreements mitigate the available ore supply and also the new mines entering into operation need five to seven years to operate at full capacity. Some deadlines have been announced in the possible lithium mines that are installed in Extremadura.
