Ganfeng: downside on lithium price is limited. CATL: 10 times growth potential, high quality production capacity definitely be scarce. GAC (5th largest automaker in China): Electric cars will be profitable if lithium carbonate price stays under CNY400,000/t (~US$58,300/ton).
On 30 March 2023, Ganfeng Lithium stated that lithium carbonate prices are currently declining. This is due to two reasons: firstly, downstream changes, especially intense competition among automotive manufacturers (such as price wars for traditional fuel cars); secondly, the market previously anticipated a significant increase in supply. Currently, demand for electric vehicles in the end market remains, while there is also diversified demand, including heavy-duty trucks and energy storage. Moreover, the concentration of Australian lithium spodumene suppliers is relatively high, and the space for short-term decline in ore prices is expected to be limited. Considering that the release of production capacity for other types of resources such as lepidolite and brine has not been very fast recently, the downward space for lithium salt prices may not be significant.
The Chairman of Contemporary Amperex Technology (CATL), Zeng Yuqun, recently stated at the company's 2022 performance conference that there is still 10 times growth potential for future battery applications in the short term. "The application scope of new energy batteries is very broad, including those used for flying, swimming, running on the ground, and stationary energy storage. The market space is huge, and high-quality production capacity will definitely be scarce."
On March 30th, at Guangzhou Automobile Group's (GAC) 2022 annual performance conference, GAC's chairman, Zeng Qinghong, stated that one of the key costs for determining whether their self-owned brands can be profitable is the battery. When the price of lithium carbonate is above 400,000 yuan per ton (~US$58,300/ton), there is no profit to be made from electric vehicles. Currently, the lowest price of lithium carbonate has dropped to 280,000 yuan per ton. If the issue of raw material prices can be solved this year, GAC will be able to successfully resolve the problem of profitability for their self-owned brands.
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