When it comes to electric vehicles, the common consensus appears to be: wait, and prices will come down. Recharging an EV is already substantially less expensive than refueling a gasoline-powered car, leaving pundits and would-be EV buyers just waiting for the day that lithium-ion car batteries finally dip below the $100-per-kWh mark. That’s roughly the point at which battery-electric vehicles should more-or-less reach price parity with their internal combustion cousins.
But now, recent developments are calling into question when – and maybe if – that will ever happen.
Specifically, the price-per-ton of lithium – the titular elemental component of the lithium-ion battery – keeps going up. The metal is already sitting at an all-time high of $78,000 per ton, OilPrice.com reports, which is more than four times what it cost just four years ago. And according to the International Energy Agency, it could increase by a staggering 4,000 percent by 2040, assuming the world’s current emissions targets are met.
Why The Big Price Tag?
Apart from the broad truth that demand for lithium is increasing as automakers pump out more and more battery-electric vehicles, one particular cause for concern is a bit of global economic news that could spell decreased competition in the lithium market in the future. Namely, Argentina has officially signed on with China’s “Belt and Road Initiative” to bolster the Chinese economy and facilitate more international trade. While it’s not clear that that has any specific implications for the cost of lithium, it’s worth noting that China and Argentina are both among the globe’s biggest lithium producers.
In other words: any alliance between China and Argentina could come to represent a sizable portion of the global lithium supply, and give the two countries outsize control over the commodity’s price and distribution.
At the moment, it doesn’t seem like there’s any winning for drivers, whether they own an EV or not. At the same time that lithium prices are peaking, crude oil is surging as the world’s oil suppliers prepare for big supply disruptions related to Russia’s invasion of Ukraine. Just a few days after crossing the triple-digit mark for the first time in seven years, the price for a barrel of crude touched $115 on Wednesday, NPR reports. That’s despite 31 countries releasing a combined 60 million barrels from their strategic reserves in an attempt to stabilize prices.