Lithium Prices Drop—What It Means for EV Batteries & Global Supply Chains

/in /by

lithium

Lithium prices have been unpredictable due to global tensions and mining difficulties. As reported by S&P Global, in 2023, lithium carbonate prices shot up past $80,000 per metric ton but later dropped as supply increased and demand slowed. By early 2024, prices stabilized out but remained weak.

But as of March 21, Platts assessed lithium carbonate (CIF North Asia) at $9,200 to $9,550 per ton. This forced several deals on hold, and some mining giants auctioned lithium for better price discovery.

The report highlighted two significant auctions in the first quarter of 2025.

  • On March 5, Albemarle Corp. sold spodumene concentrate (5.61% Li₂O) for 6,701 yuan per ton at its Zhenjiang plant, slightly above the SC6 price after factoring in quality, shipping, and taxes.
  • On March 11, Jiangxi Jiuling Lithium Co. Ltd. auctioned 120 metric tons of battery-grade lithium carbonate for 75,400 yuan per ton—just 100 yuan more than the spot price in China.

These auctions suggest a small price rebound, but overall, the market remains cautious.

Spodumene and Lithium Carbonate Prices Drop

Spodumene prices, which had been relatively stable, saw a 4.7% drop from March 12 to March 21, falling to $810/t. In contrast, Platts-assessed lithium carbonate DDP China decreased by only 1.1% over the same period.

Refineries have been hit hardest, as lithium chemical prices have fallen more than spodumene prices, leading to negative refining margins since mid-2024. This ongoing squeeze on profitability poses risks for companies dependent on refining operations rather than raw material extraction.

Falling prices have forced lithium producers to scale back spending and delay projects. This is how the industry is adjusting to falling lithium prices.

lithium producers

SQM’s Profit Drops 40.9% as Lithium Prices Crash

Chile’s SQM, the world’s second-largest lithium producer, reported a 40.9% drop in fourth-quarter profit. Despite selling more lithium in 2024, falling prices hurt earnings.

Revenue hit $1.07 billion, slightly above the $1 billion analysts expected. But with lithium prices down over 80% in two years, profits took a hit.

Sales grew about 20% from last year, but lower prices wiped out the gains. “Our average price dropped over 64%,” SQM said, adding that prices in early 2025 will likely be even lower than in late 2024.

To adjust, SQM is cutting 2025 spending to $1.1 billion from $1.6 billion in 2024. Most of this will go to its Chile lithium operations ($550 million), with $350 million for iodine and $200 million for international lithium projects.

Sibanye Stillwater’s Exit Adds to Lithium Supply Worries

Similarly, Sibanye Stillwater Ltd. exited its lithium joint venture at Rhyolite Ridge in the U.S. on February 26 this year. As per the company, the project didn’t meet the expected returns at safe price estimates. However, the project had a potential capacity of producing 22,000 tons of lithium carbonate.

Experts are speculating that Sibanye Stillwater’s pullout could worsen the global lithium supply deficit. Furthermore, the rising demand for EVs may drive price swings, impacting battery costs and supply.

  • S&P Global analysed that if lithium prices stay at March’s low of $9,202 per ton (CIF Asia), then about 26% of the expected 2025 production could run at a loss due to high cash costs.

EV Boom Fuels Lithium Demand, But Policy Shifts Could Shake Market

The push for electric vehicles (EVs) is driving long-term lithium demand as automakers ramp up production. Stricter emissions policies worldwide are accelerating this shift, making a stable lithium supply more critical than ever.

PEV sales and lithium demand

Strong EV Sales in February

Global sales of passenger plug-in electric vehicles (PEVs) surged in February. In China, trade-in subsidies boosted demand, while in Europe, stricter CO2 regulations played a key role.

  • Europe’s top four markets saw a 15.8% increase in PEV sales compared to last year. New CO2 targets introduced in January 2024 pushed automakers to step up.
  • To ease pressure, the European Commission proposed a temporary measure allowing companies to meet targets over three years instead of facing heavy fines in 2025. Without this, automakers could have faced losses of €16 billion.

U.S. EV Market Faces Uncertainty

In the U.S., PEV sales grew by 6.5% year over year in February, with a 4.5% month-over-month increase. Many rushed to buy EVs before potential tax credit changes.

However, a new bill—”Eliminating Lavish Incentives to Electric Vehicles Act“—could shake up the market. Introduced by Republican senators in February 2025, the bill aims to:

  • End the $7,500 tax credit for new EVs
  • Eliminate incentives for used EV purchases
  • Cut funding for EV charging stations
  • Close tax loopholes benefiting certain buyers

If passed, the bill could slow EV adoption by making vehicles more expensive and charging less accessible. EV demand remains strong, but shifting policies could reshape the market in the coming years.

A classic example of Tesla. Despite overall EV market growth, Tesla has struggled since last year. February sales dropped significantly in key markets, falling 76% year over year in Germany and 49% in China.

A Ray of Hope: Boosting Lithium Output to Fuel Global Demand

While some lithium producers are holding tight on supplies, some are expanding mining and refining capacities to keep up with the rising demand. Australia, Chile, and Argentina continue to lead lithium extraction, while the U.S. and Europe are working to strengthen domestic production to reduce supply chain vulnerabilities.

On March 20, President Trump signed an executive order to boost the domestic production of critical minerals. The order provides financing, loans, and investment support for lithium mining and processing projects in the U.S. to reduce reliance on imports from key lithium-producing nations like China.

S&P Global also noted that new lithium refining projects are being developed for battery production. However, delays in permits, environmental issues, and geopolitical risks might once again slow expansion.

The chart below shows that each quarter of 2024 displays consistent growth, with production exceeding 100,000 metric tons by Q3 and Q4. This reflects a significant increase in lithium output. This was driven by the growing demand for EV batteries and renewable energy storage systems.

lithium output

Lithium Price Forecast

Lithium price forecasts are also following a downward trend. June and September prices are expected at $8,604 and $9,078 per ton.

LITHIUM price
Source: S&P Global Commodity Insights
This decline can push lithium producers to make more supply cuts. They need to diligently tackle cost pressures, investments, policy changes, and global risks to stay profitable. However, even though the lithium market remains volatile, the crucial mineral’s role is vital in the energy transition.

The post Lithium Prices Drop—What It Means for EV Batteries & Global Supply Chains appeared first on Carbon Credits.

Why Stellantis Still Needs Tesla’s Carbon Credits in 2025

/in /by

Why Stellantis Still Needs Tesla’s Carbon Credits in 2025

Stellantis, one of Europe’s largest car manufacturers, has announced plans to continue purchasing carbon dioxide (CO₂) emission credits from Tesla in 2025. This decision comes after new EU rules: Starting in 2025, automakers can average their emissions over three years, until 2027. 

This policy change gives automakers more flexibility to meet emission targets. However, Stellantis is still committed to using Tesla’s carbon credits to meet environmental standards.

The decision shows the challenges of moving to electric vehicles (EVs) and highlights the need to balance rules with business plans.

Understanding Carbon Emission Credits

CO₂ emission credits are an essential part of emissions reduction policies. Governments limit how much CO₂ companies can release. This is especially important in transportation, where emissions are a big worry.

Although there have been efforts to cut transport emissions in the EU by increasing the use of EVs, overall emissions have not changed much since 2005. In 2023, emissions were estimated to be 0.8% lower than in 2022.

carbon emissions from transport EU
Source: European Environment Agency

A company that emits less than its limit earns carbon credits. These credits can be sold to companies that exceed their allowances.

For automakers, this system encourages investment in cleaner technologies. Slow-moving companies must either pay fines for high emissions or buy credits from automakers with extra. 

Tesla, which produces only electric vehicles and has low emissions, generates excess credits that it sells to other automakers, including Stellantis.

Since 2019, Tesla has made about $10 billion by selling carbon credits, which has become a major source of income. This financial benefit lets Tesla invest in new technology, research, and production and helps strengthen its position in the EV market.

Tesla annual carbon credit revenue in 2024

Stellantis’ Strategy: A Temporary Fix or Long-Term Dependence?

Stellantis depends on emission credits. This shows the challenges it has in meeting EU emission standards. In 2025, Stellantis’ EV sales in Europe accounted for just 14% of its total sales—well below the EU’s target of 21% for that year.

The company is investing in EV production. However, it hasn’t met the EU regulations yet. To comply, it will need to buy credits.

Jean-Philippe Imparato, head of European operations at Stellantis, said, “I’ll use everything.” This shows that the company is fully committed to meeting emission rules. 

Stellantis is working hard to boost its EV production. However, it still needs Tesla’s credits to keep going. Imparato further added: 

“The 2027 extension ‘gives us some breathing space, but does not provide a solution.”

The automaker has announced plans to ramp up hybrid and electric vehicle production. A new hybrid version of the Fiat 500 will begin production at Stellantis’ Mirafiori plant in Turin, Italy, in November 2025.

The company aims to produce 130,000 units per year, including both hybrid and fully electric versions. This move is part of a two-part strategy. It aims to ensure quick regulatory compliance and invest in EV technology for the future.

Stellantis’ Long-Term Plans

While Stellantis is purchasing carbon credits in 2025, it is also taking steps to strengthen its EV strategy. The company announced investments in battery production and EV infrastructure. These will help reduce its reliance on emission credits in the future.

One of Stellantis’ key initiatives is its plan to expand its electric vehicle lineup. The company is focusing on developing new battery technologies to improve efficiency and lower costs.

Stellantis is pushing forward with its electrification plans, aiming for all its sales in Europe to be battery electric vehicles (BEVs) by 2030. In the U.S., it targets 50% BEV sales for passenger cars and light-duty trucks by the same year.

The company, which owns 14 well-known brands, plans to launch 75 BEV models by 2030, with a goal of selling 5 million units annually. Starting in 2025, all new luxury and premium models will be fully electric. By 2026, this strategy will expand to all vehicle segments in Europe.

Stellantis Roll Out of Battery Electric Vehicles (BEVs)

Stellantis EV rollout production plan
Source: Stellantis

The European carmaker is also looking for partnerships with battery makers and energy firms. This will help improve its EV supply chain. All these are part of the automaker’s goal to reach net-zero emissions by 2038. 

In the next few years, Stellantis plans to boost its EV sales. This will help cut down on buying carbon credits from other companies. The company is focusing on hybrid and fully electric models. This way, it can gradually transition to meet market demand and follow regulatory rules.

European Union’s Emission Regulations

The European Union has strict emissions regulations. These rules aim to encourage automakers to reduce carbon emissions. Automakers must meet specific fleet-wide CO₂ emission targets, which become stricter over time. 

Initially, car manufacturers were required to meet individual targets by 2025. In response to industry concerns, the EU extended the compliance period. Now, automakers can meet targets by averaging their emissions from 2025 to 2027.

This change gives automakers more flexibility. It also allows them time to adjust their production plans. However, it does not remove the requirement to meet strict emission targets in the long term. 

Stellantis will keep buying Tesla’s carbon credits, even with the compliance extension. This shows the company views these credits as a needed short-term fix while it aims for a more sustainable future.

Industry Perspectives on Compliance and Credit Purchases

The EU’s extension of the compliance period has sparked debate within the auto industry. Some automakers view it as a necessary adjustment that allows them time to scale up EV production without facing immediate financial penalties. Others argue that it could slow the transition to EVs by reducing the pressure on automakers to meet strict deadlines.

Environmental organizations have also raised concerns about the impact of the extension. They say that giving automakers more time to follow regulations might slow down the move to lower emissions. This could hurt efforts to reduce climate change effects.

However, automakers like Stellantis see the extension as a way to balance business sustainability with regulatory requirements.

The company’s decision to continue buying CO₂ credits from Tesla in 2025 highlights the challenges automakers face in meeting stringent emissions targets. The EU’s compliance extension gives temporary relief. 

The post Why Stellantis Still Needs Tesla’s Carbon Credits in 2025 appeared first on Carbon Credits.

Meta and EFM Join Forces to Deliver 676,000 Forest Carbon Credits by 2035

/in /by

meta

EFM, a forest investment and management firm, has signed a long-term deal with Meta. They will provide 676,000 carbon removal credits by 2035. This agreement will transform 68,000 acres of forest on Washington’s Olympic Peninsula to “climate-smart management”, removing over one million tonnes of carbon emissions in the next ten years.

Bettina von Hagen, CEO from EFM, expressed herself by saying,

“This long-term contract enables us to manage forests for their greatest value to society—producing high-quality timber, creating diverse, healthy habitats for wildlife and recreation, and collaborating with tribes to restore salmon populations—all while significantly increasing carbon storage. We’re deeply grateful to Meta for recognizing the critical role forests play in addressing climate challenges and for sharing our vision of high-quality carbon projects that enhance the long-term value of our forests. Together, we’re ensuring these landscapes will benefit communities, sawmills, tribes, investors, home builders, and everyone who depends on the health of commercial forests for generations to come.”

Meta Backs EFM’s Climate-Smart Forest Transition

EFM is an investment and management firm. It manages over 200,000 acres of FSC-certified forests. The firm uses climate-smart strategies in the Pacific Northwest and beyond. With 20 years of experience, EFM is now expanding into new markets. These markets allow climate investments to benefit investors, communities, and the public.

This contract guarantees steady, long-term carbon revenue. It reduces financial risks for climate-smart forest management. EFM’s funds and other investors will fund this new entity.

One major investor is the Natural Capital Fund, managed by Climate Asset Management. It has raised more than $1 billion from companies and institutions. This funding supports nature and carbon projects around the globe.

Significantly, with Meta’s early support, the project got an innovative approach, which, in turn, made large-scale climate-smart forest investments easier.

The deal also shows how carbon finance in forestry is evolving. Normally, landowners sell carbon credits only after buying the property. But this new approach allows carbon revenue fund purchases upfront, making investing easier.

A New Step for Its Climate Commitment

Tracy Johns, Carbon Removal Lead at Meta, said,

“As part of Meta’s goal to achieve net zero emissions across our value chain in 2030, we focus our strategy on understanding and reducing our emissions, and removing any remaining emissions through carbon removal credits. We support high-impact projects, and EFM’s extensive track record in sustainable management of forests made them an ideal partner and aligned with our goals. Our commitment to this project supported EFM’s efforts to take an approach to forest management that not only drives strong climate and forestry outcomes, but also provides real value and environmental services to local communities.” 

Each carbon credit stands for a reduction of one metric ton of carbon dioxide emissions. This gives companies a way to offset their carbon footprint. For Meta, this step aligns with its goal to reach net-zero emissions across its entire value chain by 2030.

As per its latest sustainability report, in 2023, Meta’s net emissions equaled 7.4 million metric tons of CO2. Key commitments include:

  • Cutting Scope 1 and 2 emissions by 42% by 2031. This is based on a 2021 baseline. Also, make sure most suppliers adopt science-based GHG reduction targets by 2026.

  • Keeping Scope 3 emissions at or below 2021 levels by 2031.

Meta
Source: Meta

To tackle residual emissions, Meta invests in nature-based and technological carbon removal projects. These projects help fight climate change and boost biodiversity.

The company signed a carbon offset agreement with BTG Pactual’s forestry arm, Timberland Investment Group (TIG). The deal involves buying up to 3.9 million carbon credits through 2038.

Scaling Forest Management to Slash Carbon Emissions

The forests in the Pacific Northwest store more carbon per acre than any other ecosystem. Improved Forest Management (IFM) offers a strong opportunity to cut greenhouse gases in the air.

IFM extends harvest cycles and protects carbon-rich areas while still allowing timber production. The big advantage is that it can be scaled quickly, with a noticeable impact within a decade.

Revitalizing the Olympic Rainforest

The Olympic Rainforest covers 68,000 acres on Washington’s Olympic Peninsula that was previously managed for timber. It is located next to the Olympic National Park, a World Heritage Site and Biosphere Reserve.

EFM’s FSC-certified, climate-smart management approach aligns perfectly with the region as it offers opportunities for climate action, conservation, and biodiversity.

They use the 5Rs™ strategy, i.e., Rotation, Reserves, Retention, Restoration, and Relationships.

efm
Source: EFM

The benefits of scaling Climate-Smart Forestry include the following:

  • One Million Tonnes of Carbon Removal: Improved Forest Management (IFM) can capture more than 10 million tonnes of CO₂. It could also remove more than one million tonnes of carbon in the next decade.

  • Sustainable Timber Growth: EFM plans to almost double timber stocks in 15 years. This will improve forest health and boost long-term timber production.

  • Conservation on a Large Scale: This acquisition supports big conservation efforts. It creates a 150-mile corridor from Hood Canal to the Olympic Marine Sanctuary. This impacts 5 million acres.

  • Boosting Biodiversity: Conservation will support endangered species and aid in wild salmon restoration.

  • Tribal Collaboration: This project allows you to work with the Quileute and Hoh tribes. You’ll focus on wildlife, restoration, and cultural harvesting.

  • Public Access and Tourism: EFM will improve access to national parks. They will link up with trails such as the Olympic Discovery Trail and the Pacific Northwest National Scenic Trail.

Most importantly, EFM’s years of experience in forest carbon projects ensure that buyers get quality credits. It uses ACR’s dynamic baseline method. This helps prevent over-crediting carbon credits.

Martin Berg, Chief Executive Officer of Climate Asset Management, commented,

“When we set up Climate Asset Management four years ago, it was very much with a pioneering spirit, to become a world leader in natural capital investing. So, it is particularly pleasing to have worked with EFM and Meta in completing the acquisition of Olympic Rainforest, with its innovative long-term contract, on behalf of the investors in our Natural Capital Fund. We remain committed to supporting bold and scalable nature-based investments to secure a more climate-resilient, nature-positive and inclusive world.”

The post Meta and EFM Join Forces to Deliver 676,000 Forest Carbon Credits by 2035 appeared first on Carbon Credits.