Global Electric Vehicle Sales are Accelerating

Sales of global plug-in electric cars (including hybrids) increased to around 442k vehicles in May 2021, according to InsideEVs. This represents a 199% uplift compared to May 2020. Sales in March were even higher at just over 500k vehicles. During the first five months of 2021, total worldwide EV sales were almost 2m vehicles representing a global market share of 5.8% compared with 4% a year ago, where sales were 750k.

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Global Planned Gigafactory Capacity Increased

In response to the rising EV sales momentum, planned global battery gigafactory capacity is increasing. Based on committed investments announced during the June Quarter, the global capacity planned to be achieved by 2030 has increased by 460 gigawatt hours (GWh) to 4,200GWh.

Due to this planned gigafactory demand, conversion capacities of battery inputs in China are increasing rapidly, underpinning further demand. Battery inputs such as spodumene (lithium concentrate) are converted into lithium hydroxide or lithium oxide. Over nine months lithium carbonate capacity has increased from 14.5k tonnes a month to 20.5k tonnes; while lithium hydroxide capacity has increased from 12.3k tonnes a month to 14.5k tonnes.

Higher Prices For Lithium Carbonate and Lithium Hydroxide Battery Materials

Lithium chemical prices continue to rise. Global weighted prices for lithium carbonate increased by 15.6% to US$12,432 per tonne in the June Quarter and are almost twice those in August 2020, according to consultancy Benchmark Minerals. Prices however, have recently stabilised due to higher imports from Chile and growing seasonal production from China domestic lithium brine projects in Qinghai Province. Lithium hydroxide prices maintained a premium over carbonate prices at US$13,873 per tonne in the June Quarter. Battery cathode producers are flagging tight availability of lithium hydroxide, partially resulting from supply constraints of Australian spodumene. When you’re hot, you’re hot!

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