The world’s largest lithium producers told a major industry conference this week that they remain bullish on long-term demand for the electric vehicle battery metal, despite the recent plunge in lithium prices.
Once a niche metal primarily used in ceramics and pharmaceuticals, lithium demand has grown rapidly over the past decade. However, oversupply from China and a softening of aggressive EV adoption rates have dragged lithium prices down more than 80% in the last year.
Despite the gloomy mood in the industry, which has seen layoffs and curtailed expansions, the mood at the Fastmarkets Lithium Supply and Battery Raw Materials Conference in Las Vegas reflected a cautious hope among attendees that the industry can meet an expected demand jump later this decade as EVs and battery storage technologies grow more popular.
“We’re really focused on the fundamentals of the underlying business,” said Patrick Howarth, head of Exxon’s lithium division, which announced it would expand its lithium production plans in Arkansas. “We’re not scared off by low prices, and we’re not drawn in by high prices.”
Fastmarkets data shows U.S. demand for lithium will increase 29% each year through 2030, with jumps also expected throughout the rest of the world. Ashley Zumwalt-Forbes, the U.S. Energy Department’s deputy director for batteries and critical materials, told the conference that “critical minerals are the oil and gas of our energy future.”
While the industry has faced recent setbacks, producers remain optimistic about the long-term trajectory of lithium demand. They warned, however, that unless prices rise, the supply expansions planned in Africa, China, and Australia may not materialize.