On the supply side, while some high-cost mines in Australia have reduced production rates to lower utilization, new mines in mainland China, Argentina, and Zimbabwe continue to ramp up output, keeping overall production in surplus. Moreover, large-scale mines can resume full production in approximately one month, potentially exacerbating the oversupply and limiting the space for future price recovery. Manufacturers, anticipating potential market fragmentation or supply chain disruptions, are maintaining stable production levels to avoid losing market share, further impeding the rebound of lithium prices.
On the demand side, the primary driver is the slowing demand for electric vehicles in the U.S. According to BloombergNEF, the U.S. market share for EVs is projected to reach only about 33% by 2030, far below the earlier forecast of 48%. Additionally, the Trump administration's inclination to support fossil fuels may dampen confidence in the EV market. While Europe and mainland China are actively promoting EV policies, traditional automakers have shown signs of wavering in their transition to electrification. This uncertainty, coupled with mainland China's leadership in battery technology, has intensified global market competition.
Beyond supply and demand factors, geopolitical tensions—such as those between China and the U.S.—add further complexity. Export controls, such as China's restrictions on lithium technology exports or the U.S. reducing EV subsidies and relaxing emissions standards, could negatively impact lithium demand. If global lithium markets fragment into opposing trade blocs, supply-demand balance would be further disrupted.
Despite these challenges, the lithium market still holds long-term potential. The ongoing global energy transition, the growing EV market (HEV, PHEV, and BEV), and the rising prominence of the energy storage market will sustain steady lithium demand. For stakeholders in the lithium market, addressing short-term challenges while seizing long-term growth opportunities will be a critical operational focus in the coming years.