Over Half of EV Battery Metal Agreements Delayed or Scrapped as Lithium Prices Plunge
More than half of the supply agreements between Western automakers and miners for battery metals have been delayed, renegotiated, or canceled following a sharp decline in lithium prices, according to the Financial Times.
Automakers including General Motors, Tesla, and Stellantis signed long-term contracts for metals such as lithium and nickel from 2020, aiming to secure supply as electric vehicle (EV) production accelerated.
However, lithium and other battery metal prices have tumbled from their peaks, making it increasingly difficult for miners to finance new projects and undermining efforts to create alternatives to China-dominated supply chains.
Analysis by the Financial Times of data from Benchmark Mineral Intelligence shows that 17 of 32 deals for lithium, nickel, and cobalt signed between 2020 and 2024 have been canceled, postponed, or renegotiated.
“Delays reflect the current low-price environment for lithium and other battery metals,” said Adam Webb, head of battery raw materials at Benchmark. “Financing is challenging, which leads to project development delays.”
Lithium carbonate traded at just under $10,000 per ton at the end of October, down from more than $70,000 per ton in 2023, as a surge in Chinese production created a global supply glut.
The oversupply has reduced carmakers’ incentive to commit to long-term offtake agreements, as materials can be sourced elsewhere.
Many manufacturers have also scaled back EV targets due to lower profitability and concerns about U.S. trade policies.
For example, Ford agreed in 2022 to purchase lithium from Ioneer’s Rhyolite Ridge project in Nevada, but the mine remains unbuilt.
Similarly, South Africa’s Sibanye-Stillwater withdrew from a deal to acquire a 50% stake for nearly $500 million, with production now expected to start in 2028.
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