President Donald Trump’s lowering of electric vehicle targets may temporarily slow demand for lithium and other critical minerals, but is unlikely to hamper the mining industry amid growing global demand for electric drives, analysts and industry leaders said. industry.
On Tuesday, Trump revoked his predecessor Joe Biden’s executive order, issued in 2021, that sought to ensure that half of all new vehicles sold in the US by 2030 were electric. Automakers had been preparing for a surge in demand for EVs, largely due to that move by Biden.
Trump’s order sent shares of Japanese automakers, South Korean battery makers and lithium miners in Australia, the United States and China tumbling.
But even if demand for electric vehicles cools in the world’s second-largest auto market, analysts and industry experts expect momentum elsewhere to more than make up for it.
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Trump has planned other regulatory changes to cut support for EVs and charging stations. It also seeks to strengthen measures that block imports of cars and battery materials from China.
“Every time subsidies or benefits are eliminated (…) it is a blow to the demand scenario,” said analyst Glyn Lawcock at Australian investment bank Barrenjoey. “(But) ultimately, demand will continue to grow, even if the US is a little slower under Trump.”
Australian lithium producer Liontown Resources stated that the global transition to electric vehicles is underway, with or without the United States.
“Long term, I just don’t think it’s going to be a problem for demand,” Liontown CEO Antonino Ottaviano said on a call with analysts on Tuesday.
Much of the EV industry’s growth is happening in China, which accounts for 11 million sales or 65% of the market, compared to North America, which accounts for 20% of the market, Liontown executives said on the call.
Meanwhile, the rest of the world already accounts for 1.3 million EV sales and is growing 27% annually, a trajectory that will see it become more significant than the entire North American market in less than two years, executives added. Liontown.
That growth potential is something Chinese EV makers are looking for, given that they are locked out of the US market due to the 100% tariffs on electric vehicles imposed by Biden.
For example, large-scale batteries that store days of electricity are gaining popularity around the world. Essential metals are also used to make many consumer electronics, as well as computer servers needed to power the artificial intelligence industry.
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Albemarle, the world’s largest lithium company, declined to comment on Trump’s order. Arcadium, a lithium producer that is about to be acquired by Rio Tinto and the International Lithium Association trade group, was not immediately available for comment.
Rio Tinto also declined to comment on Trump’s order, but its CEO Jakob Stausholm said at the World Economic Forum that he remains bullish on the white metal.
“Lithium demand will probably increase fivefold in the next 15 years, so many more lithium projects will have to be built,” he said at the forum in Davos, Switzerland, adding that he has owned an EV for more than nine years.
“It’s just a better car” than an internal combustion engine, Stausholm added.
David Klanecky, CEO of private battery recycling company Cirba Solutions, expects demand for essential minerals in the US to increase by 2030 due to demand not only for EVs, but for a wide variety of electronic products.
Beyond any setbacks on targets, miners said they believe measures to reduce Western manufacturers’ dependence on Chinese supplies will sustain support for their metals.
“We expect that the measures taken to build supply chain independence from China (…) will have a much greater impact than the setback of a formal EV sales target,” said Darryl Cuzzubbo, CEO of Arafura, an Australian developer. of rare earths.
“There is an imminent tipping point for electric vehicles where targets and incentives will no longer be necessary to encourage adoption,” he added.
With information from Reuters
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