The dramatic drop in key mineral prices portends a battery cost revolution, with profound implications for the electric vehicle industry. In an environment shaped by oversupply and revised demand, we unravel the implications along the value chain, from mining to the end consumer, highlighting a potentially more affordable future for electric mobility.

The market for key minerals for lithium-ion batteries, such as lithium, cobalt and nickel, has experienced a historic drop in prices. Lithium carbonate has traded at around $11,000 per tonne, down considerably from $70,000 a year earlier. With a decrease exceeding 80% for lithium from its highest peak between 2022 and 2023, the industry is forced to re-evaluate strategies and expectations.

In fact, the automotive industry is finding a path towards the manufacture of affordable electric vehicles. And that´s because according to BloombergNEF, the average price of battery packs fell to $139/kWh this year, down 14% from $161/kWh in 2022, marking the largest drop seen since 2018.

However, unlike previous years where innovation was the main driver of cost reductions, this year´s decrease is mostly attributed to lower raw material costs.

Redefining the Global Mining Landscape

It is the case of the global mining industry which is undergoing a significant transformation phase, influenced by this volatility in the prices of essential minerals for battery manufacturing. This transformation highlights the adaptability and varied responses of different regions:

  • Australia, traditionally strong in the mining of these minerals, faces challenges with site closures and reductions in production, underscoring the need for adjustments in the face of falling prices.
  • Latin America stands out for its resilience, thanks to lower extraction costs and strong lithium production, especially in countries such as Chile and Argentina, which use lower-cost salt deposits.
  • Africa, with Congo as a leader in cobalt production, is working towards more sustainable and ethical mining practices, seeking to take advantage of global demand while facing logistical and regulatory challenges.
  • Canada and Russia remain key players, with vast nickel and cobalt resources. These countries are looking to diversify markets and improve extraction technologies to maintain their competitiveness.
  • China continues its dominance in rare minerals refining and lithium production, adapting quickly to market fluctuations and securing its position in the global supply chain through strategic investments.

This global picture reflects an evolving industry, with countries and regions adapting to new market realities through innovation, improved mining practices and expansion of production capacity.

Challenges and Opportunities for Manufacturers

Nevertheless, the transition to lower prices for electric vehicles is complex and requires strategic adaptation in case of manufacturers. Managing upstream inventories and long-term contracts, which still reflect higher prices, is crucial to align production costs with market expectations.

This is why adoption is slower than expected, but the electric vehicle market continues to grow, positively influenced by lower battery prices.

Battery production in China, for example, has outpaced global demand, signaling an oversupply that could have long-term implications for the pricing and affordability of electric vehicles. In addition, the utilization rate of battery cell manufacturing plants has decreased compared to the previous year, indicating production below maximum theoretical capacity. This aligns with a trend of some automakers adjusting their production targets downward.

BloombergNEF envision that battery prices will follow the trajectory of raw material prices, anticipating a further reduction to $133/kWh next year. In the long term, battery prices are expected to fall below $100/kWh by 2027, a milestone that has been widely recognized as the break-even point for achieving price parity with internal combustion vehicles. However, this analysis underscores the complexity of achieving price parity, varying significantly by region and vehicle segment.

In addition, regional battery price dynamics will be crucial in the coming years. With prices lowest in China ($126/kWh) compared to the United States and Europe, where costs are 11% to 20% higher, respectively, the location of battery manufacturing could influence prices in the near term.

However, policies such as the $45/kWh production tax credit for cells and packs under the Inflation Reduction Act in the US could help mitigate some of these costs.


The decrease in raw material and lithium-ion battery prices is an encouraging sign for the electric vehicle industry, promising to make them more accessible to a wider audience.

Although the road to affordability is fraught with challenges, including the need for continued investments in capacity expansion, research and development, and improvements in manufacturing processes, the commitment of institutions such as CIC energiGUNE to advanced research ensures steady progress toward sustainable and economically viable electric mobility. With each technological breakthrough and market adjustment, we move one step closer to a future where electric vehicles are the norm, accessible to all, thus driving a greener and more sustainable global energy transition.

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