The lithium industry is feeling considerably more upbeat about its future, with growing demand for battery storage systems helping to make up for a slowdown in electric vehicle sales in certain markets, according to top producers who spoke at a major industry conference in Las Vegas this week.
For years, electric vehicles were the primary force driving demand for lithium. But regulatory shifts in the United States and other countries have dampened EV sales in some important markets. That cooling came at the same time the industry was producing too much lithium, sending prices tumbling.
Now, a rising need for stationary battery storage systems — fueled by the rapid growth of artificial intelligence and efforts to modernize power grids — is changing the industry’s outlook for the better.
“The period of market overcorrection is over,” said Raju Daswani, CEO of consultancy Fastmarkets. “Energy storage has become a primary driver of growth in this market.”
Daswani said Fastmarkets estimates that lithium demand for battery storage systems is expanding at a rate of 40% per year. “This is a fundamental change and it adds a robust foundation if you compare it to a far-more volatile consumer-driven electric vehicle demand picture,” he said at the Fastmarkets Global Lithium, Battery and Critical Materials Conference in Las Vegas.
Attendance at the conference — considered the world’s largest annual gathering of lithium investors, executives, and consumers — climbed 10% this year to approximately 1,100 people, according to organizers.
The overall atmosphere at this year’s event was noticeably more positive compared to last year’s gathering. Lithium prices have more than tripled in the time since.
“Lithium demand in the next two years is going to be much more balanced between EVs and energy storage,” said Jérôme Pécresse, who leads Rio Tinto’s aluminum and lithium business unit. The company has plans to increase its lithium production capacity by 2028.
Albemarle, identified as the world’s largest lithium producer, reported that it is seeing consistent growth in the battery storage sector, which it contrasted with the more unpredictable nature of EV demand. “Grid storage is much more evenly distributed around the world,” said Eric Norris, the company’s chief commercial officer, speaking to reporters on the sidelines of the conference. “It’s an interesting demand driver.”
In another sign of market confidence, ioneer announced Monday that it had signed a letter of intent with Hyundai Engineering and an arm of the South Korean government to provide support for its lithium project in Nevada.
Despite the improving conditions, industry executives called on governments to do more to financially support lithium processing — a segment currently dominated by low-cost Chinese companies. G7 leaders last week agreed to better coordinate efforts aimed at strengthening Western lithium and nickel markets.
“What are governments willing to pay for security of supply? There’s a tax to be paid for that, and it hasn’t been paid yet,” said Dale Henderson, CEO of PLS, described as Australia’s largest independent lithium producer.
The U.S. assistant energy secretary, Audrey Robertson, encouraged industry players to pursue technological innovations that could transform how lithium and other critical minerals are processed and traded. “The way that we’re processing lithium today is not the way we’re going to process it in five years,” Robertson told reporters at the conference.
