Lithium producers hit by first big downturn of EV era

The burgeoning lithium industry, which produces the powerhouse metal used to make electric vehicle batteries, has entered its first major downturn, an unwelcome bruising for investors eager to help combat climate change with lithium-ion batteries.

Albemarle Corp., Tianqi Lithium Corp. and other suppliers have been producing more lithium than automakers need. Global supply exceeds demand by about 5 percent, according to Canaccord data.

That comes as electric vehicle sales in China — the world’s largest EV market — fell by nearly a third in September amid sliding government subsidies, the third consecutive monthly decline, according to Jefferies.

A global average of prices is down more than 50 percent since the start of 2018, according to Benchmark Mineral Intelligence, a metals pricing provider that is hosting an EV supply chain conference this week in Los Angeles.