Lithium prices rose more than 400% in 2021; supply agreements failed to keep up
Why the most common lithium pricing mechanisms don't serve the strategic aims of the EV market
Lithium prices shot up by more than 400% in 2021, but producers’ profits didn’t follow the same trajectory. Instead, the vast majority of producers found themselves locked into long-term, fixed-price supply agreements, at prices as low as 300% below spot market rates.
A more sophisticated pricing mechanism is required to ensure the lithium market can attract the investment it needs to meet surging EV demand.