The lithium sector in South America’s “lithium triangle,” which spans Argentina, Chile, and Bolivia, has long been central to the global race for extracting the battery metal needed for electric vehicles.
Lately, though, the race has been red-flagged as lithium prices have plummeted by over 80% since early 2023. This has been driven by oversupply and weaker-than-expected demand for EVs, impacting profitability and financing across the sector.
According to a report from Reuters, Argentina, the world’s fourth-largest lithium producer, is experiencing a wave of financial cutbacks and project slowdowns due to the price collapse. Companies such as Galan Lithium have slashed production targets, and other firms, like Argosy Minerals, have taken more drastic measures, laying off workers and shutting down pilot plants.
This slowdown isn’t just impacting the small players. Even major firms, including Rio Tinto and Arcadium, have put large-scale expansion plans on ice. Arcadium alone has shelved nearly $500 million in expansion projects between Canada and Argentina. The overall market downturn has pushed analysts to lower Argentina’s production forecast for 2027 by about 10%, weakening the country’s position as a leading lithium producer.
For automakers and battery manufacturers banking on Argentine lithium to power their EV fleets, this slowdown could complicate supply chains. Experts forecast a potential supply shortfall by the end of the decade, just as global EV demand begins to rise sharply. While prices may bounce back by mid-2025, the current oversupply and weak demand are expected to keep pricing low through 2026.
While the lithium boom may have hit a rough patch, the long-term need for the metal remains strong, driven by the world’s shift toward battery-operated everything.
Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by subscribing to our newsletter.
