The exponential surge in demand for electric vehicles has led to lithium prices reaching an all-time high. According to Shanghai metals market statistics, the average price of battery grade lithium carbonate is USD 73,060 per tonne, up 2.8 times over last year.

Demand:

The rise of electric vehicles has a significant impact on lithium consumption. We are living in an era of global sustainability, and lithium is the most significant metal in the transformation process. With batteries being the most critical component of a cleaner and greener world, the demand for lithium has recently soared. According to S&P Global Analytics, electric car sales will reach 26.8 million units by the end of the decade. According to Bloomberg NEF, lithium consumption will quadruple from last year's level by 2025. According to Fortune Business Insights, the worldwide EV market will rise from $287.4 billion in 2021 to $1.32 trillion in 2028.

Super Cycle:

Many EV experts believe that lithium has entered a supercycle. It indicates that the demand wave is so large that it might take a decade for supplies to catch up with demand. With the EV and sustainable environment pushing demand to new highs, many analysts predict it will take a while for miners to catch up.

China’s part:

China accounts for more than half of global electric car sales, making it a prominent participant in the electric vehicle sector. After tripling so far in 2022, the Chinese battery grade lithium achieved an all-time high of $74,475 per tonne. The fact that the new Chinese government is more active in its net zero ambitions has come as welcome news in the community. The government has shown unprecedented support for the EV industry by extending the tax exemption for the purchase of new vehicles until the end of 2023. The province of Sichuan alone contributes for 20% of China's lithium output.

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Written By: Thegoldstocks.com

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