Lithium Prices Plummet Amid Decreased Demand for Electric Vehicles

Islamabad:The value of lithium, once likened to “white gold” due to its crucial role in electric vehicle (EV) batteries, has significantly dropped recently, reflecting a broader decline in both lithium and EV demand.

**Key Developments:**

– **Historical Context**:
– Lithium was once a highly sought-after resource, found in countries like Bolivia, Chile, and Australia, driving wealth and job creation. However, since March 2023, lithium prices have plummeted by over 80%.

– **Current Situation**:
– China, which supplies half of the world’s lithium production and is known as Asia’s lithium capital, has seen its lithium producers halt production in an attempt to curb the price decline.
– Similarly, Albemarle Corporation, one of the largest global lithium businesses based in the U.S., has also scaled back production.

– **Impact of Electric Vehicle Market**:
– The drop in lithium prices is directly tied to the electric vehicle market. Many countries have reduced or eliminated incentives for purchasing EVs, leading to decreased demand for lithium.
– Experts cite two main reasons for the price drop:
1. Increased production capacity leading to oversupply of lithium.
2. A significant slowdown in the electro-mobility market over the past couple of years.

– **Battery Prices**:
– While there has been a reduction in battery prices this year, they remain beyond the reach of the average consumer. However, China’s largest lithium-ion battery producer, CATL, claims that battery prices could be halved within the next three years.

The lithium market’s volatility highlights the challenges and shifting dynamics in the global transition to electric vehicles and renewable energy.