Saudi Press

Saudi Arabia and the world
Friday, Aug 22, 2025

Electric-car demand pushes lithium prices to records

Electric-car demand pushes lithium prices to records

Driven by a surge in Chinese electric-vehicles sales, the sharp rise in a key commodity for batteries could slow adoption of EVs globally.

Surging prices for lithium are intensifying a race between automakers to lock up supplies and raising concerns that a shortage of the battery metal could slow the adoption of electric vehicles.

Lithium carbonate prices in China, the benchmark in the fast-growing market, stand at about $71,000 a metric ton, according to price-assessment firm Benchmark Mineral Intelligence. That is almost four times as high as a year ago and just below the record set this March in yuan terms.

Lithium is an outlier in commodity markets that have broadly retreated in recent months, reflecting gloom over an economic outlook dimmed by the Federal Reserve’s interest-rate increases and stuttering growth in China and Europe. Brent Crude Oil and copper—commodities used throughout industry and transportation—have fallen about 15% and 7%, respectively, this quarter. Even European natural-gas prices, propelled higher for much of 2022 by Russia’s move to cut supplies, have dropped by 10% over the past month.

Hummer EV are seen on the production line as President Biden tours the General Motors "Factory ZERO" electric vehicle assembly plant, in Detroit, Nov. 17, 2021.


However, lithium keeps rising, driven by a pickup in electric-vehicles sales in China, the world’s biggest market for EVs. Car purchases jumped after Shanghai eased 1COVID1-19 lockdowns in June, juicing demand for lithium-ion batteries. The China Passenger Car Association forecasts six million new EVs will be sold in the country this year, double the 2021 level.

"Lithium is really following the Chinese EV market and that’s just taking off," said Edward Meir, a metals consultant at brokerage ED&F Capital Markets. "This is a preview of what could await us in the U.S."

Draining supplies further, power outages caused by a heat wave in central China curbed output of refined lithium carbonate and hydroxide, which go into battery cathodes. Suppliers in Sichuan province—which has a third of China’s lithium processing capacity—closed factories for several days and ran down inventories to meet their sales commitments, said Rystad Energy analyst Susan Zou.

Workers lower an R1T truck body onto a chassis in the assembly line, April 11, 2022, at the Rivian electric vehicle plant in Normal, Illinois.


In the U.S. and elsewhere, traders and analysts expect demand for lithium to leap in the coming years as the auto industry phases out internal-combustion engines and rolls out electric vehicles. Companies including General Motors Co., Ford Motor Co. and Volkswagen AG are racing to catch up with front-runner Tesla Inc., investing billions of dollars to bring EV factories online.


All have struck deals with lithium producers to lock down scarce supplies. More than 80% of lithium-ion batteries are used for EVs, said Daisy Jennings-Gray, senior analyst at Benchmark Mineral Intelligence. That will rise to 90% in 2030, Benchmark forecasts, from 40% in 2015.

High prices have encouraged companies to embark on lithium projects in Latin America and Australia, the two biggest-producing regions. However, analysts say they will take years to hit full speed and ease the shortage, in part because left-leaning South American governments are angling for greater control over their countries’ natural resources.

Regulations such as California’s tax on lithium extraction are likely to delay mines in the U.S. and Europe, say analysts at Citigroup. Demand will outstrip production by 4% this year, they forecast. Concerns about the effect of lithium mining on water supplies and other environmental worries also have held back efforts to crack open new deposits.

German Chancellor Olaf Scholz, left, talks to Elon Musk, Tesla CEO, at the opening of the Tesla factory Berlin Brandenburg in Gruenheide, Germany, Tuesday, March 22, 2022. The first European factory in Gruenheide, designed for 500,000 vehicles per ye


High lithium prices are a boon for the small group of companies that dominate global supply and have reported surging profits. U.S.-listed shares of Albemarle Corp. have jumped 23% this year, while those of Sociedad Química y Minera de Chile SA have more than doubled. The S&P 500, in contrast, has dropped 19%. Matt Tuttle, chief executive of Tuttle Capital Management, said he is looking to add more lithium stocks to his portfolio, expecting them to continue outperforming the broader index this year.


A big bottleneck is in refining, which converts spodumene and industrial-grade lithium carbonate before selling battery-grade lithium carbonate and hydroxide to cathode makers. China dominates this part of the supply chain. Two big producers in Russia have been shunned by Western companies since President Vladimir Putin invaded Ukraine, reducing global capacity.

"I would like once again to urge entrepreneurs to enter the lithium-refining business," Tesla Chief Executive Elon Musk told analysts in July. "There’s lithium pretty much everywhere, but you have to refine the lithium into battery-grade lithium carbonate and lithium hydroxide, which has extremely high purity. So it is basically like minting money right now."

Elon Musk speaks about Tesla's new batteries at a conference. 


Auto makers and government officials are concerned about the security of supply given the scarcity of material and China’s pivotal position in processing lithium. The Inflation Reduction Act signed into law by President Biden last month sets thresholds for the amount of lithium and other minerals that must come from the U.S. or its free-trade partners for EVs to qualify for tax credits.

In a sign of the dash to buy lithium, a closely watched auction of Australian spodumene—a rock that contains unrefined lithium—fetched a bid of more than $7,700 a dry metric ton on Tuesday. That is equivalent to a production cost of $74,000 a metric ton of lithium carbonate, which would mark an all-time high, according to consulting firm Rystad.

"It’s very competitive," said Kevin Smith, managing director for energy-transition metals at commodity trader Traxys. "Supply is trying to catch up with demand. It’s still not a balanced market."

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Cristiano Ronaldo Makes Surprise Stop at New Hong Kong Museum
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
High-Stakes Trump-Putin Summit on Ukraine Underway in Alaska
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Nine people have been hospitalized and dozens of salmonella cases have been reported after an outbreak of infections linked to certain brands of pistachios and pistachio-containing products, according to the Public Health Agency of Canada
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
Tariffs, AI, and the Shifting U.S. Macro Landscape: Navigating a New Economic Regime
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
OpenAI’s Bold Bet: Teaching AI to Think, Not Just Chat
BP’s Largest Oil and Gas Find in 25 Years Uncovered Offshore Brazil
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Russia Formally Recognizes Taliban Government in Afghanistan
×