Lithium price rises by 355 percent: Growth rate of electric vehicles may slow down

The price of lithium, which is critical for electric vehicle batteries, has increased by 355 percent in the last year. It is predicted that this fact together with the reality of limited supply sources may disrupt the growth rate of electric vehicle sales.

With the clean energy transformation that has gained momentum in the world in recent years, the importance of critical minerals is also increasing. Many critical minerals such as lithium, copper, nickel are used in many clean technology products, especially wind turbines, solar panels and batteries.

Also, the proliferation of these technologies means that more and more critical minerals will be needed.

Clean energy technologies currently account for 30 percent of the demand for lithium, one of the minerals critical for the performance, life and energy density of batteries. This ratio is projected to rise to 75 percent by 2040. Lithium demand, driven by clean energy technologies, is expected to show the fastest growth among other critical minerals.

60 PERCENT OF LITHIUM PROCESSING CAPACITY IS IN CHINA

The fact that 52 percent of lithium’s mineral production takes place in geographically restricted regions of the world, including Australia, Chile 22 percent and China 13 percent, also brings supply risks.

In order for the lithium mine to be used in batteries or similar products, it needs to be converted into lithium chemical and lithium hydroxide, and to do this, it needs to be processed and refined. 60 Percent of the global lithium processing capacity is located in China alone. Therefore, any disruption that could disrupt lithium supplies in China is reflected in an increase in prices.