Even the Congo knows about it: lithium prices tumble 40%

The collapse in lithium prices, down **40%** over the past year, raises questions about the profitability of lithium mining and the pace of the energy transition.

## The fall of white gold

**Lithium**, the metal hailed as the "white gold" of the electric mobility era, is going through a rough patch. Its price has plunged **40%** over the past year, a drastic drop that runs counter to the expectations that had built up. The excessive optimism about battery demand for electric vehicles and electronic devices seems to have collided with the harsh reality of the market.

## Factors behind the decline

Several factors explain this correction. For one, **lithium production** has risen significantly in recent years, driven by forecasts of unstoppable demand. Countries such as **Australia** and **Chile** have ramped up extraction, flooding the market. On top of that, demand for electric vehicles has slowed in some key markets, such as **China**, leading to excess inventories. Global economic uncertainty is not helping either, dampening consumption of durable goods.

## Implications for the future

This scenario has consequences. For mining companies, profitability is shrinking, which could curb new investment in exploration and extraction. For the energy transition, lower lithium prices could be good news, making batteries—and therefore electric vehicles—cheaper and more accessible. However, it could also discourage investment in more sustainable extraction technologies if margins become too thin. The future of lithium, and by extension of electric mobility, is now more uncertain.