Lithium carbonate prices in China fell to approximately 75,000 yuan ($10,300) per tonne in February 2026, down roughly 80% from the November 2022 peak of 600,000 yuan. The collapse has been driven by a surge in supply from new mines in Australia, Chile, and China, combined with slower-than-expected EV adoption in Europe and the US.
The Oversupply Problem
CATL, the world's largest battery manufacturer, has seen its lithium costs decline substantially, leading to cheaper batteries and lower-priced EVs. However, the supply glut has created financial pain across the mining sector. Australian spodumene miners Pilbara Minerals and Mineral Resources have reported sharply lower revenues, while several smaller operations have suspended production or entered care and maintenance.
In Chile, SQM and Albemarle have maintained production from their low-cost brine operations in the Atacama salt flat, which remain profitable even at current prices. The Chilean government's new lithium policy, which requires state partnership in future developments, has added uncertainty to long-term supply planning.
Demand Outlook
Despite the price weakness, long-term lithium demand fundamentals remain strong. BloombergNEF projects that global EV sales will reach 20 million units in 2026 and 35 million by 2030. Battery storage deployments for grid stabilisation are also growing rapidly. The question is whether current prices are low enough to discourage the new mine investment needed to meet this future demand.
Sodium-ion batteries, championed by CATL and BYD for low-cost vehicles, have emerged as a partial substitute for lithium-ion in the small car segment, potentially limiting lithium demand growth at the lower end of the market.
For lithium price data, visit Trading Economics. For battery market research, see BloombergNEF.