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Falling metal values in early 2023 could bring EV prices down

Experts believe metal values will continue to fluctuate with varying rates of EV adoption, innovation and supply chain improvements

Against analyst predictions, metal values have steadily declined in early 2023, possibly setting the scene for more affordable electric vehicles.

According to data from Benchmark Minerals, prices of metals used in electric vehicle batteries have been falling month-over-month since January. Costs of Lithium have dropped by roughly 13% since January, and 1.8% year-over-year. Other metals, such as copper and cobalt, have also decreased significantly in 2023. The car market is already starting to reflect these changes, with brands such as Tesla offering more and more discounts.

These changes contradict the forecasts of market analysts, who expected metal values to remain inflated for the foreseeable future. Many reasoned that the sudden interest in electrification would strain the world’s diminutive lithium mining and processing infrastructure. This prediction is also supported by the previous two years of data, which showed prices rising steadily since 2020, with only a quickly recuperated fall observed in mid-2022.

However, a variety of factors have begun to take their toll on metal values, complicating analyst forecasts. For one, the automotive industry has been heavily investing in new mining and processing ventures. Efforts from the Biden Administration to reduce American dependency on Chinese businesses have also influenced brands to find new sourcing partners, improving global infrastructure for battery manufacturing. Furthermore, many OEMs are struggling with fluctuations in EV demand, partly due to an affordability crisis. These variables have loosened the bottlenecks around lithium and other materials, allowing suppliers to catch up to the workload. Unfortunately for car makers, this lull is unlikely to last much longer, since any one of these factors could change in the coming months.

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CBT News Staff Writer
CBT News Staff Writer
For over 12 years, CBT News has been informing and helping automotive retail professionals grow their businesses and thrive in their careers through an awarding-winning, on-demand streaming platform. With exclusive interviews featuring the biggest names in the industry, daily newscasts, up-to-date market data, and exclusive articles covering the latest trends, CBT News is your #1 source for auto industry news and content.

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