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