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Lithium prices jumped on Friday to a fresh all-time high amid soaring demand from growing electric vehicle sales, which the current supply is struggling to meet.
The price of lithium, a key component in battery manufacturing, has more than tripled over the past year, according to Bloomberg estimates. And on Friday, the price of lithium carbonate in China surged to a new record of $71,400 (500,500 Chinese yuan) a ton, per data from Asian Metal cited by Bloomberg.
Strong demand from EV sales growth and lower production in China in recent months has led to a new rally in lithium prices.
EV sales in China are expected to double this year to a record 6 million vehicles, according to a forecast by the China Passenger Car Association.
Globally, 4.2 million battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) were sold worldwide in the first half of 2022, up by 63% compared to the same period of 2021, analyst company Canalys said in research in August. 57% of EVs, or 2.4 million new EVs, were delivered in mainland China, and another 1.1 million EVs were delivered to Europe, according to Canalys.
The United States is still catching up in terms of sales, with 414,000 EVs delivered to customers in the first half of 2022. But the EV share grew from 3% of new cars in H1 2021 to 6% of new cars in H1 2022, a rise of 62%, Canalys noted.
“Despite the improved range of vehicle types and EVs from more brands, Tesla still accounted for almost 60% of sales in the US in H1 2022. Popular car brands in the US, such as Chevrolet, Ford, Honda, Jeep, Nissan and Toyota, currently sell very few EV models between them. The sooner this changes, the better, and the US EV share will grow,” said Chris Jones, VP and Chief Analyst at Canalys.
However, record high lithium prices, production disruptions in key supplier China, and supply chain issues could slow the growth in EV rollout globally as high raw material prices would trickle down to EV prices, analysts say.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com,