The cancellation of electric vehicle (EV) industry support by former U.S. President Donald Trump may temporarily slow down the demand for lithium and other essential minerals, but analysts and industry leaders suggest it is unlikely to hinder the growth of the mining sector, particularly against the backdrop of surging global EV demand.
On Tuesday, Trump revoked an executive order from former President Joe Biden issued in 2021, which aimed to ensure that half of all new car sales in the U.S. are electric vehicles by 2030. Automakers had anticipated a significant increase in EV demand due to this policy.
Trump’s decision led to a drop in stock prices for Japanese automakers, South Korean battery manufacturers, and lithium mining companies in Australia, the U.S., and China. However, even with a potential slowdown in U.S. EV demand, analysts and industry experts expect that demand from other markets will compensate for this shortfall.
Glyn Lawcock, an analyst at Australian investment bank Barrenjoey, stated, “Whenever subsidies or incentives are cut, demand expectations are impacted. But ultimately, even if U.S. EV demand slows down somewhat during Trump’s term, the demand will still grow.”
Australian lithium producer Liontown Resources noted that the global transition to electric vehicles is already underway, regardless of U.S. participation.
Liontown CEO Antonino Ottaviano mentioned in a conference call with analysts on Tuesday, “From a long-term perspective, I believe the demand issue won’t be substantial.”
This company’s executive highlighted that the growth of the EV industry is primarily happening in China, where sales reached 11 million units, making up 65% of the global market, while North America accounts for only 20%. Additionally, other countries are experiencing a 27% annual growth rate in EV sales, which is expected to surpass total North American sales in less than two years.
Darryl Cuzzubbo, CEO of Australian rare earth developer Arafura, stated, “We expect that measures to establish independence from the Chinese supply chain will have a more significant impact. The EV sector is reaching a critical point, where goals and incentives will no longer be needed to encourage the adoption of electric vehicles.”
