Lithium sales are tanking as the demand for electric vehicles cools. North Carolina–based manufacturer Albemarle Corp., the largest lithium provider for electric-vehicle batteries, reported a much lower quarterly profit than expected this week. Reuters reports:
Albemarle reported third-quarter net income of $302.5 million, or $2.57 per share, compared to $897.2 million, or $7.61 per share, in the year-ago period.
Excluding one-time items, Albemarle earned $2.74 per share. By that measure, analysts expected earnings of $3.99 per share, according to IBES data from LSEG.
For the year, the company trimmed its net sales forecast to a range of $9.5 billion to $9.8 billion. Albemarle previously expected $10.4 billion to $11.5 billion.
It’s somber news for lithium producers, who mirrored automakers’ initial optimism over electric vehicles. Oversupply and weak demand plague the lithium market because consumers, it turns out, don’t have as high a desire for electric vehicles as was expected. Investors are now responding, and the downturn in the lithium market isn’t confined to Albemarle; lithium producers Pilbara Minerals and Livent also issued sluggish quarterly reports. Producers say they expect long-term demand for lithium to strengthen over the next few years.
But electric-car sales tell a different story. Andrew Stuttaford wrote last week about General Motors’ abandonment of its plan to produce 400,000 EVs in two years — an unachievable goal, given the slowdown in electric-vehicle sales:
Americans must be an ungrateful, foolish and selfish people, or so some, I suspect, would like us to believe. Despite generous tax incentives, a “boiling” planet, and the technological wonders of our new electric vehicles (EVs), they do not seem to be buying EVs at the pace that has been expected of them.
Government coercion and environmental pipe dreams do not good markets make, Andrew notes. Companies upped mineral supply to support battery production when governments announced lofty plans to adopt greener forms of transportation, but consumers just aren’t biting. Electric vehicles are too expensive, for one. Chevy’s small Equinox EV will start at around $35,000, the F-150 Lightning pickup comes in at $70,000, the Mustang Mach-E is $42,995, and $100,000 is a modest estimate for luxury EVs. Gas counterparts are anywhere near 20 percent to 50 percent less expensive than electric vehicles, and even with tax credits and increased federal pressure to buy, environmentally friendly cars attract younger buyers who, of course, are not likely to buy ridiculously expensive cars, no matter how green they might be. Charging infrastructure is also too weak to support a mass influx of electric vehicles, and, practically, the cars are smaller and unreliable on long drives.
A worldwide lithium shortage is predicted for as early as 2025, a shortage that relies on a continued and aggressive electric-vehicle campaign. The push for electric vehicles, it’s always worth remembering, was not natural; that’ll be all the more evident as mineral industries adjust to slowing demand.