In April, I argued that if the low-cost EV is delayed or canceled by #Tesla, the price of Li2CO3 will not reach 20K/ton or above anytime soon. https://x.com/jczuleta/status/1780048360818266525… Will my forecast end up being correct?
...lithium carbonate price has dropped -10% since the March price resurgence that led to hope.
...supply will continue but like Juan said, demand is the issue.
...what has transpired since?
* Biden administration imposing a quadruple increase in tariff on Chinese EVs
* US/EU/Japanese car makers stepped back from embracing EVs, choosing to defer full EV model rollouts
* US/EU consumer preference turning towards hybrids
* Tesla's change of business model direction away from pure EV play to Robotaxi concept, which would have the effect of reducing need to produce and sell as many Tesla EVs
* Cost-of living and inflation curbed consumer capacity to afford high priced EVs, while high auto delinquencies plague the US markets
* Great number of unwanted Tesla vehicles in US suburban car parks, Chinese EVs unsold clogging up European ports
* Chinese Govt issued mandate to curb battery overcapacity and oversupply, reducing lithium demand
* UK Govt delaying phasing out of ICE vehicles, a move that EU car makers are coaxing the EU to emulate
* Lithium companies in US and China making big losses, with no sight of turnaround in the coming 1-2 years Lithium carbonate prices were at the CNY 105,000 per tonne in May, trading in a tight range since reaching the two-and-a-half-year low in February amid the ongoing surplus of raw material for electric vehicle battery manufacturers. The electric vehicle industry still deals with the fallout of gluts of batteries across the supply chain, but Chinese lithium producers continued to expand capacity and hunt for new reserves, increasing expectations of surpluses. Additionally, hopes that the market will eventually balance out drove Chile set plans to double output for the world’s second-largest producer over the next decade. Such developments follow cuts in battery prices as EV producers continued to take advantage of high inventories of input materials and finished product from extensive subsidies from Beijing in 2022. Additionally, sweeping tariffs from the US and trade barriers from the EU raised uncertainty over China’s ability to offset slowing EV demand with higher exports.
