The big picture: Prices of raw materials required to manufacture electric vehicles have fallen steeply since January. The situation has perplexed some analysts that fully expected EV prices to remain high or even increase, effectively slowing the transition from combustion engines to those powered by electricity.

According to supply chain analyst Benchmark Minerals, the price of lithium used in EV batteries is down nearly 20 percent since January (as of March 20). Copper, which is found in both batteries and EV motors, has slipped roughly 18 percent during the same period. The price of cobalt, another core material in batteries, has been cut in half since the beginning of the year.

Savings are already trickling down to consumers. Tesla recently implemented its fifth price adjustment of 2023, lowering the price of its two most expensive EVs in an effort to make them accessible to more buyers. The Model S and Model S Plaid are $5,000 cheaper after the latest cuts. The Model X SUV, meanwhile, received an even larger $10,000 price cut.

Data from Kelley Blue Book reveals the average selling price of an EV in the US dropped by $1,000 from January to February.

"The desire for people to own a Tesla is extremely high," said Tesla CEO Elon Musk during the company's investor day earlier this month. "The limiting factor is their ability to pay for a Tesla," he added.

Others have echoed similar sentiments. Kang Sun, CEO of battery maker startup Amprius Technologies, told The New York Times that cost is the major roadblock right now for electric vehicles. Sun specifically mentioned lithium as a commodity that could drive new EV sales.

The cause of falling prices is up for debate. Some point to slowing sales growth in China and Europe after EV subsidies dried up. Others believe new mines and processing plants coming online are helping ease supply constraints of materials like lithium but if that is the case, it could work itself out in a timely fashion as demand for lithium is expected to increase 42-fold by 2050 to support a planned transition to clean energy.

Image credit: Charging by Andrew Roberts, Mine by Pixel