Going electric is getting pricier. Rising demand for electric vehicles (EVs) has propelled lithium carbonate prices in China up by 276% since the start of the year to $30,940 a tonne, report Zandi Shabalala and Pratima Desai for Reuters. The metal is a vital ingredient for the rechargeable batteries that go into phones and laptops, and roughly a third of the global output of lithium carbonate equivalent (LCE) is used to manufacture the lithium-ion batteries that power electric vehicles.
Rising lithium prices alone will not sink the EV industry, says Al Root in Barron’s. At most they will add a few hundred dollars to the final retail price of a vehicle. Higher prices are needed to bring more supply online. A typical EV needs ten kilograms of lithium to power its 5,000 or so battery cells. To produce the 30 million vehicles annually that Elon Musk thinks the global industry is heading for will require “1.8 million tonnes of LCE… five times the size of the total lithium mining industry in 2019”.
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