With the price of lithium plunging since January, experts say that electric vehicles (EVs) could become more affordable in the long run.
The price drop marks the end of lithium’s two-year-long rally, as the unit cost for the vital material for EV battery production dropped by over 65% since the start of this year. Indeed, while prices peaked at more than $85,000 per ton back in November, a ton of battery-grade lithium salt now sells below $30,000.
At present, Canada has around 3.2 million tons of various lithium oxides in several deposits within the country.
Good News for Consumers
For Electric Mobility Canada CEO Daniel Breton, this downturn in the cost of lithium could be a godsend for those who are contemplating the purchase of an EV.
Breton believes that, as the cost of the minerals used in EV battery production decreases and production itself becomes a part of the mainstream automotive industry, Canadian consumers could potentially see EVs being sold between $25,000 and $40,000.
Should this occur, it would be a feather in the cap for Electric Mobility Canada as it marks a milestone toward its goal of helping EVs become a part of the automotive and consumer mainstream.
What Do Lower Prices Mean for Mining Firms?
Surprisingly, the Canadian mining sector does not seem to be perturbed by the way profit margins are being pinched hard by lower prices elsewhere.
Josée Méthot, chief executive of the Quebec Mining Association, explains that the industry is used to the way mineral prices fluctuate from time to time. While it does cause some investors to shy away from the field, more experienced financiers – particularly those who know how to read the economic headwinds in terms of market performance and demand – will not mind at all.
Frontier Lithium CEO Trevor Walker shares this sentiment, going so far as to say that it is nothing to be worried about even if the production cost for lithium only runs to about $10,000 per ton at the most. Indeed, Walker says that the lithium sector remains quite profitable for active producers.
Experts also opine that the demand for lithium salts is bound to grow in light of how automotive firms in Ontario have begun manufacturing electric vehicles, batteries, and other necessary parts. In this case, the Canadian lithium sector is in a good position to offer excellent opportunities to related enterprises.