LONDON (Reuters) – Lithium is the metal that will power the coming electric vehicle (EV) revolution. The build-out of a lithium-ion battery chain, however, is at risk from depressed pricing and a lack of investment in new capacity.
“Money needs to start flowing into the lithium market quickly, or the road to electrification will be stunted by lithium supply, in even the most conservative of forecasts.”
That warning from specialist consultancy Benchmark Minerals Intelligence (BMI) was written in July last year. (“Lithium’s Price Paradox”) Since then prices have slid further and COVID-19 has massively disrupted both battery manufacturing and end-use demand in a collapsing automotive sector.
Established lithium producers have cut output and deferred expansions. The junior players who joined the lithium rush of three years ago have left in search of other mineral bounty.
The renewed paradox is that with politicians focusing auto sector rescue packages on EVs, particularly in Europe, lithium supply should be gearing up not gearing down.