Caixin
Mar 14, 2022 08:20 PM
BUSINESS

In Depth: How Spiking Lithium Prices Might Throttle China’s EV Market

Staff work at a new-energy vehicle factory in Yuncheng, North China's Shanxi province, on Dec. 14, 2021. Photo: VCG
Staff work at a new-energy vehicle factory in Yuncheng, North China's Shanxi province, on Dec. 14, 2021. Photo: VCG

Lithium, the key ingredient of batteries, had a bumper year in 2021, as electric vehicles (EVs) sales boomed globally, with China alone shifting 3.5 million units, double its 2020 total.

With new tailwinds from a commodities rally, driven largely by the war in Ukraine, the red-hot market for battery-grade lithium carbonate shows no sign of easing. The average spot price of the chemical element has nearly doubled in the past three months after shooting up 434% last year. Lithium carbonate was trading at an average price of 502,000 yuan ($79,120) per ton as of Monday, data from metal research firm Shanghai Metals Market showed.

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