The impact of the increase in electric vehicle (EV) sales in China and the sharp increase in demand for the lithium, which is important for batteries, may also slow down the global demand for EVs.
The demand for lithium is expected to increase in the coming days. The main reason affecting this is the transition of major car brands from internal combustion vehicle production to EV output. With the increase in demand, prices also increase.
The increase in lithium prices also leads to higher EV costs. Experts state that this may slow down the introduction of electric vehicles.
Lithium carbonate prices in China, which are decisive for lithium prices, are trading at around $71,000 (500,500 yuan) per ton, a four-fold increased compared to last year.
Lithium prices continues to rise as EV sales increase in China, the world's largest EV market. In other words, with the increase in demand for electric vehicles, lithium prices continue to rise. The China Passenger Car Association estimates that six million new EVs will be sold in the country this year, double the amount in 2021.
With consumer demand for battery-powered vehicles increasing, demand for lithium is expected to exceed supply and outpace global supply.
The demand for lithium will increase further with major auto brands such as Toyota, General Motors, Ford, Volkswagen, Mercedes etc. launching their electric cars and investing in the area. These companies want to secure the lithium supply by making a preliminary agreement with the lithium factories.
Experts estimate that more than 80% of the lithium-ion batteries on the market are used for electric vehicles, and this rate will increase to 90% by 2030.
PhD Candidate at Marmara University's Department of Political Science and International Relations in Istanbul, Turkey