Takeaways

• One of the main drivers of EV deployment remains battery cell prices that have reached an all-time low in September as LFP has fallen below the $60 per kWh level.

• Altogether, the raw materials cost for the average EV has now dropped to $537 from $1,342 in August 2023 and a peak of over $1,900 at the start of 2023, primarily driven by lithium, with the sales-weighted average value per EV down 75% over the past year to $236.

• A very recent lithium cost curve based on 140 projects provides a straightforward explanation of current trends in the lithium market and helps us draw interesting conclusions on both production and recycling activities.

• The curve and its analysis make it possible to understand a certain number of behaviours among lithium players and this is notably the case of Eramet and two recent announcements.

• We believe that such a move makes perfect sense at this stage of the cycle for several reasons we elaborate on in this publication.

• It is also interesting to note that almost simultaneously, Eramet and Suez have decided to suspend their battery recycling project in France.

• Low metal prices, we believe the current lithium weaknesses could persist although creating the conditions of another supply shock in the medium term, are a determining factor in the construction of Big Lithium as we have defined it across the entire value chain.

• In the meantime, the question of who “benefits from the crime” remains quite relevant: CATL & BYD.