A new report from Bloomberg New Energy Finance (BNEF) suggests that the expected shortfall in lithium supply, and therefor a rise in battery prices, is not happening. Instead, there is a glut, and it is forcing prices down.

This is the result of six new lithium mines opening in Australia (the world’s largest supplier of lithium), just as the Chinese EV market has dipped. This has resulted in a glut of lithium ore supply as EV production in other countries is still ramping up, so it is not yet needing the extra material.

According to the BloombergNEF report, prices have fallen 30% from their peak and the bottom is not yet in sight.

On top of this, Australian lithium production is expected to rise 23% over the next two years, plus the second largest producer of the element, Chile, is planning to double production over the next four years.

“The latest EV data did reveal slowing growth, inferring that on top of excess supply [of lithium], demand [for EVs] is now a problem,” Vivienne Lloyd and other analysts at Macquarie Capital Ltd. wrote in a recent report.

This, however, does depend on your choice of EV uptake forecasts, as Bloomberg’s short-term predictions for EV uptake are rather more pessimistic as compared to some others.

But even Bloomberg predict that by 2030 the supply of lithium-ion batteries will need to increase more than 10-fold, with electric vehicles accounting for greater than 70% of that demand.

So whilst the short-term future for lithium mining may appear volatile, the mid to long-term outlook looks rosy for both EV buyers and miners!