Nickel Surpasses Lithium as Most Valuable EV Battery Metal Amidst Price Volatility
Key Insights
Nickel has overtaken lithium as the most valuable metal deployed in electric vehicle batteries globally, totaling $2.20 billion from January to May this year.
This shift occurred despite significant price declines for both metals and the increasing adoption of nickel-free lithium iron phosphate (LFP) batteries in EVs.
Lithium prices have experienced a more severe slump, plummeting from over $80,000 per tonne in November 2022 to $8,450 per tonne in June.
The data highlights the dynamic and volatile nature of the EV battery metals market, challenging earlier investment expectations.
Nickel has unexpectedly surpassed lithium as the most valuable metal deployed in electric vehicle (EV) batteries globally, totaling $2.20 billion from January through May of this year, according to data from Toronto-based research consultants Adamas Intelligence. This marks a significant shift in the critical minerals landscape for the EV sector, occurring despite a considerable cooling in nickel prices and the rapid expansion of nickel-free battery chemistries.
Both nickel and lithium prices have experienced extreme volatility since early 2022, driven by speculative forecasts of EV demand. Nickel saw a dramatic spike above $100,000 per tonne in March 2022 due to a short squeeze on the London Metal Exchange (LME), though battery-grade nickel sulphate prices have since stabilized around $17,000 per tonne in the second quarter of this year. Lithium, however, has endured a far more severe downturn, plummeting from a peak of over $80,000 per tonne in November 2022 to approximately $8,450 per tonne in June, decimating investor returns.
Despite lithium's drastic price slump, its total value deployed in global EV batteries, including plug-in and conventional hybrids, reached $2.15 billion during the same January-to-May period. The narrow margin by which nickel exceeded lithium's value underscores the complex interplay of commodity prices and material deployment rates within the rapidly evolving battery industry.
Adding to the complexity, this shift in value comes amidst a notable trend towards lithium iron phosphate (LFP) batteries, which contain no nickel. LFP batteries now account for nearly half of all EV battery capacity deployed so far this year, a dramatic increase from less than 1% at the beginning of the decade. This growing preference for LFP, particularly in entry-level and standard-range EVs, highlights the industry's drive for cost reduction and supply chain diversification, even as nickel-rich chemistries remain crucial for high-performance and long-range applications.
As Frik Els, Editor at Large for MINING.COM and Head of Adamas Inside, notes, while the anticipated riches at the end of the EV road have not fully materialized for all battery metals, the continued high deployment value of nickel indicates its enduring importance as an investable commodity within the electric vehicle supply chain.