The lithium market is hot and doesn’t seem to be cooling anytime soon.
- As demand for electric vehicles (EVs) continues to rise worldwide, so does the demand for lithium—the key component of the batteries powering the cars—and it doesn’t seem to be stopping anytime soon.
- Lithium is one of the main ingredients needed to create rechargeable batteries for EVs.
- The high demand of this hot commodity has sent prices soaring and making it harder for automakers to get the product.
Why it’s news
EVs are the hot new item that most people are wanting to get their hands on. More than half of car buyers worldwide want an EV causing the number of people wanting EVs to hit a worldwide tipping point.
The latest EY Mobility Consumer Index shows that 52% of people looking to buy a car want to buy an EV. This is the first time the number has exceeded 50%, representing a rise of 11 percentage points since last year.
As the demand for EVs continues to skyrocket so does the demand for lithium which is one of the key ingredients to making rechargeable batteries for the vehicles.
The high prices of lithium is leaving automakers scrambling to secure a source for the product. Tesla CEO Elon Musk says that prices for lithium are “crazy expensive.”
There has also been difficulty in trading lithium. Until recently, there has been little activity in the trading market for lithium. Most of the deals were long standing partnerships between companies.
Now that the sector is starting to heat up more firms are trying to get in on the action, like Trafigura and Glencore.
Trafigura estimates that lithium demand could beat supply by about 140,000 tons this year with predictions that demand will rise an additional 200,000 tons to 250,000 tons per year through 2025, according to analyst Matt Mccall.
Now that larger firms are entering the market trading should become easier with time. In all, with the rapid growth of EVs it doesn’t seem like lithium demand will slow anytime soon.