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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Colin Velez
Colin Velez
Colin Velez is a staff writer/reporter for CBT News. After obtaining his bachelor’s in Communication from Kennesaw State University in 2018, he kicked off his writing career by developing marketing and public relations material for various industries, including travel and fashion. Throughout the next four years, he developed a love for working with journalists and other content creators, and his passion eventually led him to his current position. Today, Colin writes news content and coordinates stories with auto-industry insiders and entrepreneurs throughout the U.S.

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