The battery metals market is staging a significant comeback. According to the latest data from Toronto-based EV supply chain advisory firm Adamas Intelligence, the global raw materials bill for electric vehicle batteries topped $2 billion in December 2025—the first time it has crossed that threshold since August 2023. The surge is being driven by rising lithium and nickel prices, signaling a definitive end to the multi-year downturn that has weighed on the sector.
Data shows that the global passenger EV market, which includes plug-in hybrids and conventional hybrids, likely exceeded 30 million units sold in 2025—a 20% increase from the previous year. When measured by battery capacity deployed—a more accurate indicator of materials demand than unit sales alone—the market expanded by an even stronger 25%.
Notably, 2025 is on track to become the first calendar year in which global battery capacity deployment surpasses 1 TWh. By comparison, the total for full-year 2021 stood at just 286 GWh, meaning the market measured in GWh has nearly quadrupled in four years and is now ten times larger than in 2019.
Adamas Intelligence’s EV Metal Index, which tracks metals demand alongside prices in the EV battery supply chain, shows that the raw material bill for the lithium, graphite, nickel, cobalt, and manganese contained in batteries of EVs sold in 2025 climbed to $15.8 billion—an almost 13% gain year-on-year.
While that remains roughly half of the extraordinary levels seen in 2022, the outlook for 2026 is already brighter, with a significantly improved pricing environment taking shape. December’s estimated raw material spend hit its highest level in 27 months, and with lithium and nickel prices continuing to accelerate into the new year, momentum is building.
Cobalt staged a notable recovery in early 2025, helping lift the index. December cobalt sulphate prices were up more than 200% year-on-year, and cobalt’s contribution to the overall index reached 14% for the year, amounting to $2.4 billion—just shy of the 2022 annual record. This performance came despite ongoing efforts by automakers to reduce cobalt content in NCM and NCA batteries, as well as the rapid adoption of LFP chemistry.
LFP batteries accounted for nearly half of total deployed battery capacity in 2025. China alone was responsible for 83% of global LFP rollout, and within the country, LFP now commands a 70% share—a figure that continues to grow. Global LFP deployment expanded twice as fast as the broader market in GWh terms, posting 50% year-on-year growth.
Lithium, meanwhile, posted more modest gains in value terms for the year, with the lithium contained in newly sold EV batteries valued at $6.5 billion—up only slightly from 2024 and far below the 2022 peak of $22.1 billion. However, the full impact of surging spodumene concentrate prices from Australia has yet to be felt at Chinese conversion plants. Heading into 2026, rising lithium prices and the spread of LFP beyond China are expected to lift lithium’s share of the overall index significantly.
Nickel also delivered a standout performance. The value of nickel deployed in 2025 increased 7% year-on-year, surpassing $6 billion for the first time on an annual basis. December ex-factory nickel sulphate prices in China were up by double digits year-on-year, and prices have continued to climb in early 2026. Pre-subsidy buying in the U.S. ahead of the September expiry of EV retail incentives further boosted demand for high-nickel cathodes.
Regional dynamics continue to shape demand patterns. In the U.S., high-nickel cathodes dominate, with LFP accounting for just 6% of the market. Europe’s LFP share remains modest at 12%, but the region’s overall EV growth outpaced China’s in 2025, supported by the reintroduction of generous subsidies in countries like Germany.
China presents a more mixed picture, with LFP dominant and mid-nickel batteries—used in roughly one-fifth of EVs sold—filling a gap between entry-level models and high-performance vehicles.
As 2026 gets underway, attention is squarely focused on lithium and nickel. Talk of export quotas in Indonesia has driven a surge in nickel sulphate prices since the start of the year, while lithium prices continue their upward trajectory. Graphite, though up 16% in value to $686 million in 2025, faces price headwinds and slowing EV market growth, making it less likely to capture the same level of attention as its battery metal counterparts in the year ahead.
