According to the International Energy Agency (IEA), prices for critical raw materials essential to electric vehicle (EV) production—namely cobalt, lithium, and graphite—have dropped by more than 80% from their recent peaks, despite continued strong global demand for EVs.
The significant decline in prices is attributed primarily to a sharp increase in global production, particularly in major supplier nations such as China, Indonesia, and the Democratic Republic of Congo. These countries have ramped up output in recent years, alleviating supply constraints that once drove prices to historic highs during the initial global EV expansion phase.
Lithium, which is crucial for EV battery production, has seen some of the steepest declines, reflecting expanded mining and refining capacity in China and Australia. Cobalt and graphite—key components in battery cathodes and anodes, respectively—have experienced similar trends, with the Democratic Republic of Congo maintaining its dominant position in global cobalt mining and Indonesia scaling up its graphite supply chain.
While the fall in raw material prices has eased cost pressures on EV manufacturers and battery producers, the IEA notes that market volatility remains a concern due to geopolitical factors, regulatory shifts, and potential fluctuations in demand. Nevertheless, the current trend offers a window of opportunity for accelerating the transition to cleaner transportation by reducing production costs and, potentially, consumer prices.
The IEA’s findings reflect broader dynamics in the global energy transition, underscoring the importance of diversified supply chains and sustainable resource management as demand for electric vehicles continues to grow.
