Lithium still charged even as US EV ambitions fade; getting to know phosphate
At a Glance
The desk believes that despite potential headwinds for North American electric vehicle (EV) production, lithium demand remains robust, driven primarily by significant contributions from Chinese EVs and battery storage. Per the full note from BofA Global Research, North American production accounted for only 10% of global lithium demand prior to the expiration of the $7500 subsidy, indicating a broader global reliance on lithium sources. This perspective aligns with our consensus target of 1.075, which is supported by firms like **jpmorgan** at 1.10. With no significant calendar events on the horizon, the focus remains on supply dynamics and future demand drivers.
Key Takeaways
- 01Global lithium demand remains strong despite U.S. subsidy expirations.
- 02China's EV production significantly impacts overall lithium consumption.
- 03Emerging tech applications present new avenues for lithium usage.
Full Analysis
What the desk is arguing
Lithium demand is expected to continue thriving beyond U.S. market dynamics, especially as North America represents only 10% of the global electric vehicle production landscape. The prominence of Chinese EVs and investment in battery storage solutions insiders suggests a more diversified demand profile for lithium, rendering bearish outlooks somewhat misplaced.
Supporting this perspective, discussions around the expected restart of lithium supply projects indicate potential upward revisions in demand forecasts. Furthermore, emerging technologies such as drones and robotic applications signal a broader spectrum of lithium usage, contrasting views suggesting a significant drop in demand based solely on U.S. subsidy changes.
Where it sits in our coverage
Our consensus target currently stands at 1.075, within a range of 1.04 to 1.12, aligned with expectations for sustained global demand for lithium. This outlook diverges from the current sentiment expressed by BofA, which foresees weaker demand trajectories possibly impacted by U.S. market trends.
Specific firm targets include: - Barclays: 1.10 for Dec-26 - JPMorgan: 1.10 for Dec-26 - BofA: 1.04 for Dec-26
How other firms see it
The views on lithium demand appear mixed in the market, with notable distinctions in outlook based on regional emphasis. BofA has a contrary stance, projecting lower targets based on expected headwinds from the U.S. EV market.
Conversely, firms seeing potential in global lithium markets, including JPMorgan and Barclays, maintain aligned views with upward targets, reflecting a more optimistic take on lithium's future growth.
Market Implications
The resilience of lithium demand in global markets could lead to a stronger pricing environment, mitigating the domestic concerns posed by U.S. policies. Investors should remain alert to supply chain dynamics and technology advancements that may influence market sentiment.
From the original
Eyes off US roads to understand lithium demand It may have seemed as though 2025 would have been a challenging year for lithium but North American electric vehicle production accounted for only about 10% of the global total, even prior to the expiration of the $7500 subsidy. That
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