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”.
UBS analysts project that by 2030 we will need to produce 2,700 GWh of lithium-ion batteries annually to supply the EV industry, says Dan Runkevicius in Forbes. That is 13 times the amount of battery power we use now, or “225 billion iPhone 11 batteries”. Lithium is not rare, but setting up the mines needed to extract it from the earth’s crust takes time. The upshot? “Lithium producers might be in for a hell of a decade”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
‘I installed a heat pump in my home – here are five things I’ve learnt’From the size and noise of a heat pump to how much it costs to run one, Ruth Emery reveals what she’s learnt after installing one in her home six months ago
-
3 ways to work out if a stock is good valueThe only thing you can really control in investing is the price you pay for an asset – but how can you tell if you’re getting a good deal when it comes to the price of a stock?
-
Two ways to tap into monopoly profits from airportsMost investors can’t get their hands on airports. Here are two ways you can
-
Fat profits: should you invest in weight-loss drugs?The latest weight-loss treatments could transform public health and the world economy. Should you invest?
-
How investors could profit from Ramsden Holdings' four-part growth strategyRamsdens Holdings offers a diversified set of financial and retail services and a juicy yield, says Dr Michael Tubbs
-
How to invest in the booming insurance marketThe insurance sector is experiencing rapid growth after years of stagnation. Smart investors should buy in now, says Rupert Hargreaves
-
Out of America's shadow: Why Trump's tariff chaos may be good for non-US stocksOpinion Upending global investment and trade could benefit other countries at the expense of the US market, says Cris Sholto Heaton
-
BP's 'long, painful decline' – and why next year could be even tougherOpinion Long-suffering shareholders in oil giant BP have been pushing for change. It won’t come soon enough, says Matthew Lynn
-
Investment trusts tap the profits in exotic and obscure global marketsOpinion Peter Walls, manager of the Unicorn Mastertrust fund, highlights three investment trusts as he shares where he'd put his money
-
Falling revenues and mounting debt spell trouble for Jumia TechnologiesStruggling African e-commerce platform Jumia Technologies looks headed for the exit, says Dr Matthew Partridge.
