Texas [United States]: Electric vehicles have become increasingly popular in recent years, and the falling cost of Lithium has been a key factor. China has seen all-time lows in Lithium prices, with similar movements happening in North America and Europe. This is especially beneficial for Tesla, the leading electric car manufacturer - as nearly half of their cars are manufactured in China. With cheaper Lithium prices, Tesla is set to benefit from more cost-efficient production of their vehicles.

Tesla, the innovative electric vehicle maker, is set to gain from declining Lithium prices in China. The country is where Tesla produces almost half of its vehicles.

Lithium is critical for the development of modern batteries used by EVs. The Lithium cost has been decreasing due to various global investments, with recent record lows in China alongside similar trends in North America and Europe. This drop in prices could offer a major benefit to Tesla's electric vehicle production and bring further cost savings that can be passed on to consumers.

Today, the Chinese Lithium market plummeted to 260,000 yuan ($38,079) per ton, falling from its price in November of last year by more than half. Though analysts had predicted prices would drop before the end of the year, this sudden decrease was far steeper than anticipated.

The contributing factors to this freefall are varied. Most notably, the Chinese government recently ended incentives for electric vehicles which has caused a slight dip in their adoption rates. Additionally, competition has ramped up exponentially as Lithium extraction and refining capabilities have rapidly increased in the New World.

South America has become an increasingly important hub for Lithium extraction, with Chile leading the way. The continent contains a wealth of surface brines from which high-grade Lithium can be extracted. Additionally, governments and corporations in North and Central America have poured money into Lithium investments, particularly as the US strives to reduce its reliance on Chinese supply. This has created new opportunities for many countries on the continent as countries look to capitalize on the potential of this versatile resource.

Tesla's battery costs have been on the decline, which has had a major effect on the company's bottom line. China and the Americas have seen a more pronounced drop than Europe, but Europe has also experienced some cost savings. With such reduced costs in its core components, Tesla can now offer more flexible pricing in their vehicles. This gives them an edge over other auto makers who lack their level of profit margins.

Tesla's announcement of price cuts earlier this year has sent shockwaves throughout the EV industry. Now, with Lithium prices on the decline, Tesla is likely to implement yet another price cut—shaking up the industry even further. It remains uncertain how much more room other automakers will have to adjust their pricing and remain profitable.