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Albemarle, the world's largest lithium producer, has lowered its 2030 demand forecast for the key battery ingredient by 10 percent as it now believes the shift to electric cars in the United States and Europe will take longer. than previously thought.
Eric Norris, Albemarle's president of lithium, said demand forecasts were lowered as automakers delayed the launch of electric vehicle models in Western markets.
“Some models have been delayed, primarily outside of North America, which is delaying breakthrough time. [of EVs] in the United States,” Norris said, adding that “potentially in some parts of Europe” the change would also take longer.
Tesla, Ford and General Motors have delayed expanding their electric vehicle production capacity due to slower consumer adoption in the US, including rejection of electrified versions of pickup trucks, which would require batteries large ones that use a lot of lithium.
Albemarle now expects 3.3 million tonnes of lithium-carbon equivalent to be needed globally by 2030, down from its previous forecast of 3.7 million tonnes. The revised figure, which is triple last year's 1 million tons, still presents a challenge for the industry, executives said.
Spot market lithium prices have plunged 82% to around $13,500 a tonne since the start of 2023, leading much of the industry to turn a loss, with Albemarle posting a net loss of $618 million. dollars in the fourth quarter of 2023, compared with a profit of $1.1 billion a year earlier.
“We've seen prices drop to a level that no one can really explain,” Norris said. “Due to the unsustainable level of current prices, prices will rise.”
Albemarle's downgrade highlights how the slowdown in electric vehicle sales is likely to have a ripple effect through the end of the decade.
Last May, the company had revised up its 2030 forecast by 15 percent to 3.7 million tons of lithium due to expectations that the US Inflation Reduction Act would drive more adoption. rapid development of electric cars at a time when the electric vehicle market was booming globally.
Globally, the number of electric vehicles sold is expected to total 48.8 million units, up from 46.9 million, as consumers in China continue to turn to battery-powered cars. Drivers prefer cheaper cars with shorter range and smaller batteries, which require less lithium.
Albemarle CEO Kent Masters expects Chinese auto and battery makers, such as BYD and CATL, to advance technological advances and their ability to reduce production costs.
“China is ahead in all of that. As we are slower, China will take the opportunity to fill the gap and gain a bigger advantage.”
Analysts also said the growing adoption of plug-in hybrid electric vehicles, which also have smaller batteries, would also reduce demand for lithium.
