Lithium mine costs soar, Morgan Stanley warns it will destroy electric vehicle demand

The rising price of lithium ore has forced the cost of batteries to rise, and it has also forced the price of electric vehicles to follow suit. Morgan Stanley believes this will further reduce EV profits and even collapse the demand side.

At the same time as nickel prices are rising, don’t forget the most important raw material for lithium batteries. The price of lithium ore has risen by five times in the past year. Morgan Stanley’s latest research report shows that Chinese lithium battery manufacturers may The price was increased by 25% in response to soaring raw material prices.

Since lithium batteries are the most expensive components of electric vehicles, analysts estimate that this will result in automakers having to increase the price of electric vehicles by 15% to maintain their cost structure.

“The cost of lithium batteries has been decreasing by 3% to 7% year after year, which has almost become a law.” Analyst Jack Lu pointed out that the world is not static, and the price of mineral resources has skyrocketed, destroying the price trend of continuous decline in battery costs and building a new order. .

Experts originally predicted that the cost of lithium batteries will continue to decline with technological progress, making electric vehicles more affordable. Unexpectedly, various car manufacturers frantically pursue electrification transformation, resulting in a shortage of batteries, which in turn leads to a shortage of raw ore supply, causing costs to skyrocket from the source.

Ganfeng Lithium and Tianqi Lithium, the two largest suppliers of lithium mines in China, are expected to get rid of consecutive losses this year and pay for substantial growth.

According to a Morgan Stanley report, most of China’s battery suppliers are buying raw materials in the bulk market, rather than supplying through long-term contracts. In the past, this was a good way to curb costs. Allows lithium miners to raise prices quickly.

Rising costs may lead to slower growth in the overall electric vehicle market, but Morgan Stanley believes that Tesla may receive the least impact, and gave an “overweight” evaluation with a target price of $1,300. Obviously, Tesla is researching new battery technology that can reduce the demand for raw materials. On the other hand, it also has an exclusive source of lithium ore supply. Finally, don’t forget that when the price of all electric vehicles increases, it is not too cheap. Sla, it’s easier for consumers with limited budgets to pinch to upgrade.


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