Demand for electric vehicles is growing rapidly, but it is being held back by a shortage of lithium, a material critical for electric vehicle batteries.
Electric vehicle sales worldwide are forecast to grow 90% this year from 2020 to over 6 million units. Sales in the three largest electric vehicle markets – the US, EU and China – will grow by 150-200%.
While battery production is still under capacity, supply has lagged behind the needs of electric vehicle manufacturers. Battery material suppliers typically take one to two years to expand their production capacity and require about $ 110 million in capital expenditure per GWh of battery capacity. The high investment of time and capital means ahead of time, and battery material suppliers have been slow to expand production with the 2018 overcapacity in mind. Meanwhile, due to the depletion of stocks this year, the cost of battery materials has risen.
From January to September this year, the price of lithium carbonate increased by 171%, lithium hydroxide – by 173%, and lithium hexafluorophosphate – by 273%. Other materials also rose in price, albeit to a lesser extent: for cobalt – by 34%, nickel – by 21%.
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