In the early 1900s, electric vehicles (EVs) outsold all other types of cars until mass production of the internal-combustion engines in the 30s caused their popularity to wane (businessinsider.com), primarily due to a much less expensive price tag.
Fast forward to today, the popularity of EVs is again on the rise due to a resurgence partly fueled by concerns over the effects of climate change and government incentives. Automakers have aimed to attract more buyers by offering a large variety of EVs with more affordable models. However, ongoing supply chain issues and high raw material costs have presented challenges (azocleantech.com). So, despite their potential upside, recent inventory disruptions and subsidy reductions are among the reasons insiders such as Bloomberg expect the EV industry to see slower sales growth this year.
With slowing demand, especially in China, the price of lithium and other battery materials has plunged dramatically in recent months. Though some predict this will eventually lead to decreasing EV prices, others warn this results from a short-term oversupply of resources. Industry experts such as Benchmark Mineral Intelligence emphasize that EV adoption will continue to grow and drive demand, eventually outstripping the current supply and causing prices to rebound.
So, while consumers may enjoy falling prices over the next couple of years, continued pressure to increase EV production to meet new, ambitious regulations will eventually result in a market reversal for the EV industry and raw materials. Rather than falling prices, we will see them rising, especially on raw materials, which have been volatile in recent years.