Electric Vehicle Battery Core 'Lithium' Skyrockets

Record High Price of $7,100 per Ton Achieved at Australian Lithium Ore Auction
Subsidies Likely to Decide Outcome Amid Soaring Lithium Prices Driven by Electric Vehicle Demand Surge

[Asia Economy Senior Reporter Cho Young-shin] The price of lithium, a key raw material for electric vehicle (EV) batteries, is soaring to unprecedented heights. As demand for electric vehicles surges, analysts say a lithium acquisition war has begun.

[Image source=Reuters Yonhap News]

According to Chinese media including the Shanghai Securities News on the 19th, at an auction held on the 18th (local time) for lithium concentrate from Australian lithium mining company Pilbara Minerals, the winning bid was $7,100 per ton (USD). This price is 1.6% higher than the winning bid at last month's auction.

The Shanghai Securities News explained that when converted to the cost of lithium carbonate (including transportation), it amounts to 540,000 yuan per ton (approximately 106.26 million KRW). It added that the lithium won at this auction is expected to be distributed around February to March next year.

The Shanghai Securities News reported that the price of lithium carbonate used in EV batteries has continuously risen since surpassing 500,000 yuan per ton (approximately 98 million KRW) last month.

Additionally, the spot price of lithium concentrate in China recorded $5,350 per ton as of the 18th, rising by $50 per ton compared to the previous trading day, the report added.

The Shanghai Securities News forecasted that lithium prices will remain strong for the time being, as the growth rate of electric vehicles has exceeded market expectations and demand for lithium remains solid.

Batteries account for up to 30% of the price of electric vehicles, making them a crucial component closely linked to EV prices. The soaring price of lithium, a key raw material for batteries, affects the price of electric vehicles. Cost competitiveness (mass production) is the competitiveness of electric vehicles. In particular, subsidies directly impact EV sales. The Chinese government is protecting its domestic EV industry by extending subsidies for electric vehicles by one year as part of efforts to stimulate domestic consumption.