Lithium prices drive up electric vehicle costs

Source: Reference Mineral Intelligence; Graphic: Madison Dong/Axios Visuals

Lithium prices have more than quadrupled in the past year as automakers’ rush to produce electric vehicles gathers momentum.

Why is this important: Soaring prices for raw lithium – a key material used in batteries – are fueling a rise in the price of electric vehicles, hampering their appeal to consumers already facing inflation elsewhere.

  • The world weighted average price of lithium carbonate was $59,928 per metric ton in August, down from $13,924 in August 2021 and $6,128 in August 2020, according to Benchmark Mineral Intelligence.

Threat level: The price would be even higher had the Chinese yuan not weakened against the US dollar in recent months, Benchmark senior price analyst Daisy Jennings-Gray told Axios in an email.

  • “Lithium is really following the Chinese EV market and it’s just taking off,” Edward Meir, metals consultant at ED&F Capital Markets, told The Wall Street Journal. “It’s a preview of what could be in store for us in the United States”

By the numbers: Average electric vehicle prices rose 15.6% in August from a year earlier to more than $66,000, according to Kelley Blue Book. That’s about $18,000 more than the overall average price for new vehicles.

To monitor : Whether automakers can hit their EV cost-cutting targets while lithium prices remain high.

  • General Motors recently announced plans for the 2024 Chevrolet Equinox EV to have a starting price of “around” $30,000.

(Editor’s note: Kelley Blue Book is owned by Cox Enterprises, which recently acquired Axios.)

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