As we all know, the most critical part of the New Energy Vehicle (NEV) model is the three electric systems. The three electric systems are combined with a battery system, electric drive system (power semiconductor), and electronic control system. Among them, the battery accounts for more than one-third of the cost of the whole vehicle. Most of the batteries applied by EVs are lithium batteries.
The importance of the lithium battery can be seen from events such as BYD’s Lithium Mining Rights Hit Hard by Chilean Government and Honda, Hyundai and GM Motor Backed Battery Company SES Listed on NYSE Officially more clearly.
In recent years, a boom in battery demand has been driven by rising global environmental awareness and the new energy revolution, in which batteries are replacing traditional fossil energy sources. In addition, of course, the global spread of the epidemic has affected lithium mining. Product transportation prices rise and lack of available workers are also major reasons for the lithium price skyrocket.
However, China Passenger Car Association Chief (CPCA) Cui Dongshu holds the opposite view that rising lithium prices will likely hit the NEVs industry. Cui stated in a recent meeting that “We shouldn’t be overly concerned about lithium battery resources. While others are hesitant, this is a once-in-a-lifetime opportunity to advance the development of new energy vehicles. This (Lithium Price) is a short-term resource mismatch. The global scarcity of lithium batteries will eventually be overcome as technology improves and massive amounts of cash are spent. “Cui also believes that carmakers will be able to relieve the strain, allowing the NEVs market to expand faster in 2022.
In China, the average price of lithium carbonate was RMB 122,000 per ton in 2021, up 177 percent year on year. However, China is currently a relative leader in production capacity, whether for industrial use or battery production, and its lithium reserves are not in short supply. As a result, no significant price increases are envisaged across the NEV sector.
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