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CHARTS: EV battery metals bill sets new low as lithium, nickel, cobalt price slump continues
In the first eight months of 2024, the global electric vehicle (EV) industry has witnessed a remarkable surge in battery power, totaling 674.6 GWh. This surge arises amidst a notable shift towards hybrid vehicles, which typically incorporate smaller batteries, thereby leading to reduced overall metal consumption.
### The Hybrid Vehicle Trend
Despite the impressive growth of fully electric vehicles, hybrid models have gained traction as a viable alternative. In fact, the total battery capacity for plug-in hybrid electric vehicles (PHEVs) introduced this year has increased by 71%, contrasting with a modest 17% rise in full electric vehicle battery capacity. This year, the sales-weighted average battery capacity for plug-in hybrids has risen to 23 kWh, matching approximately one-third of the battery capacity found in a standard full EV.
Among PHEVs, the extended-range electric vehicles (EREVs)—which use their internal combustion engine solely to charge their batteries—are capturing significant market attention. EREVs boast an average battery capacity of 39 kWh, which exceeds that of most compact and sub-compact vehicles. The surge in EREV sales demonstrates a shift in consumer preferences, as both EREV capacity and sales have more than doubled in 2024. This growth indicates that, without the momentum from PHEVs, the narrative surrounding a downturn in the EV sector could have gained more traction.
### Fluctuations in Battery Material Costs
However, for manufacturers and miners engaged in the EV battery supply chain, the news is less optimistic. Data tracking sales and battery specifications across 110 countries indicates a continued drop in the raw material costs associated with producing electric vehicles. As prices for graphite, lithium, nickel, cobalt, manganese, and other key materials decline, the overall cost of materials per average EV has decreased from $918 in October 2023 to just $510—a significant reduction compared to a peak of over $1,900 early last year.
The most dramatic shift has been in lithium prices, which have plummeted by 74% year-on-year, with the value of installed lithium reaching an all-time low of $212 per EV in October 2024, compared to $1,444 at the start of 2023. Similarly, the cost of cobalt has dipped to just under $42, reflecting a 34% decline from October 2023, while manganese has also seen price reductions.
Graphite prices have remained relatively stable, standing at around $26, albeit this is still 13% lower than the average price during 2023.
### The Rise of LFP Batteries
Interestingly, as the battery chemistry landscape evolves, lithium iron phosphate (LFP) batteries continue to gain significant global traction. As of October, LFP technology accounted for 44% of global capacity, a growth from 33% the previous year, even as construction of LFP factories outside of China remains slow. The increasing popularity of LFP batteries is directly influencing nickel’s market value, which has declined by 25% overall.
This shift has countered the historical trend towards high-nickel cathodes, while also underscoring the appeal of nickel-based cathodes in PHEVs, due to their favorable energy density versus vehicle weight.
### Conclusion
As the EV industry progresses, embrace hybrid technologies, battery capacity trends, and the fluctuating costs of raw materials significantly influence market dynamics. Both electric and hybrid vehicles are reshaping the automotive landscape, offering a myriad of choices for consumers while also highlighting the complex supply chain that fuels this transition. For deeper insights into the battery metals market, readers can explore the latest editions of industry analyses, such as those available from reputable sources like the Northern Miner.
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