Lithium Price Forecast 2025-2030: Can Robust EV Demand Sustain the Metal?

Examining the lithium price graph over the past years feels like riding a roller coaster, featuring towering ascents followed by hair-raising descents.

Following record highs in 2022, lithium prices have since dropped by approximately 80% at the time of writing. This decline persists despite the anticipated strong demand for electric vehicles (EVs) in the coming years.

In this article, we discuss factors that could impact the lithium price forecast in the upcoming years, drawing insights from experts.

Table of Contents Table of Contents

1. Key Takeaways
2. Lithium Price Forecast Summary
3. Overcapacity, Slowing EV Sales Keep a Lid on Lithium Prices in 2024
4. 6 Drivers to Lithium Price Forecast 2024
5. Lithium Price Forecast 2024
6. Lithium Price Forecast 2025
7. Lithium Price Forecast 2030
8. The Bottom Line
9. FAQs
10. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. Lithium Price Forecast Summary
3. Overcapacity, Slowing EV Sales Keep a Lid on Lithium Prices in 2024
Show Full Guide
4. 6 Drivers to Lithium Price Forecast 2024
5. Lithium Price Forecast 2024
6. Lithium Price Forecast 2025
7. Lithium Price Forecast 2030
8. The Bottom Line
9. FAQs
10. References

Lithium Price Forecast Summary

Overcapacity, Slowing EV Sales Keep a Lid on Lithium Prices in 2024

According to economic data provider Trading Economics, the price of lithium carbonate traded in China reached an all-time high of over 575,000 Chinese yuan ($79,637.67) per ton in December 2022. The price of lithium carbonate surged 81.7% in 2022 as lithium demand, fueled by widespread adoption of EVs, surpassed supply.

The International Energy Agency (IEA), in Global EV Outlook 2023, said total lithium demand reached 128kt in 2022, exceeding supply of 126kt. Lithium demand from EV manufacturing accounted for 60% of global consumption of the metal.

Lithium lacks an active futures market due to its relatively small trading volume. The primary price benchmarks for battery-grade lithium are spot prices observed in China, Japan, and Korea — considered the largest markets for seaborne lithium.

LFP batteries are commonly used in EVs in China, while electric cars in Europe and the U.S. mostly use the more expensive NCM.

China dominates the production of LFP batteries, which supply 40% of EV demand globally by capacity, according to IEA.

Unfortunately, the lithium price’s bull run ended early. The lithium price opened 2023 near a record high of over 519,500 yuan ($71.908) per ton, but it gave its gains as the year progressed.

The metal was pressured by overcapacity in global battery manufacturing—partly due to the rapid expansion of lithium iron phosphate (LFP) batteries in China and the slowing growth of EV sales within China, which accounts for approximately 60% of new EV registrations worldwide.

Data from the IEA and World Economic Forum showed that new electric car registrations grew by 35% to reach eight million cars, slowing from 82% growth in 2022.

Furthermore, the rapid expansion has created overcapacity in EV batteries. Based on data from CRU, EV battery production reached 1 Terrawatt hour (Twh), exceeding the demand of 65 Gigawatt hours (GWh). About 52% of battery output in 2023 was from China’s LFP batteries.

By the end of 2023, lithium carbonate price reached 96,500 yuan ($13,355.48)/ton, suffering a loss of 81%.

Oversupply in lithium mining output, as miners had ramped up their production during record high prices in 2022, has added pressures on the metal and kept a lid on prices in 2024.

Lithium output rose 44% year-over-year to 993kt lithium carbonate equivalent in 2023, according to data from the Australian Government’s Office of Chief Economist in its lithium price forecast released in March.

In the first three months of 2024, the price of lithium carbonate stabilized but remained between 93,000 yuan ($12,839.10) per ton and 96,000 yuan ($13,253.60) per ton, according to Trading Economics’ lithium price chart.

The metal rebounded in the second quarter, briefly surpassing 118,000 yuan ($16,288.90) per ton in March, and remained above 100,000 yuan until the end of May before starting to decline. It briefly hit 70,000 yuan ($9,662) per ton in September and October.

The price of lithium carbonate in China has fallen about 39% in the past year, according to data from Trading Economics as of November 25.

6 Drivers to Lithium Price Forecast 2024

Will lithium prices manage to continue their recovery in 2025? Before we find out how much will lithium be worth in 2025 and 2030, let’s look into critical factors that drive the lithium price forecast in 2024.

China EV Sales to Remain Strong

Despite the decelerating growth of EV sales, analysts expected China to lead sales in the global EV market. IEA projected China’s electric car sales to rise to about 10 million in 2024, accounting for about 45% of all car sales in the country.

Citing data from the China Passenger Car Association (CPCA), Reuters reported on November 8 that electric vehicle and plug-in hybrid sales accounted for 52.5% of China’s 2.28 million overall car sales in October, or nearly 1.2 million. It marked the fourth consecutive month that battery-powered cars, including plug-ins, outsold gasoline cars in the country.

The robust sales followed a new financial stimulus from the Chinese government to accelerate the adoption of EVs. The stimulus, announced in August, doubled the subsidy for customers who trade in their gasoline cars for new energy vehicles to 20,000 yuan ($2,761) per vehicle, state media Xinhua reported.

Counterpoint Research, in a note in July, projected that China’s battery electric vehicles (BEV) would be four times that of North America in 2024 and would maintain over 50% share of global BEV sales until 2027.

EV Remains the Primary Source of Lithium Demand

The Australian Government’s Office of the Chief Economist (OCE) anticipated that the increasing adoption of electric vehicles would predominantly fuel the growth in lithium demand.

In its September Resource and Energy Quarterly, the agency projected that EV demand would surpass half of the global lithium demand in 2022. Global lithium consumption is expected to grow by 17% per year between 2023 and 2026, reaching 1,615 kt lithium carbonate equivalent by 2026 from 1,008 kt LCE in 2023.

However, the agency predicted slower EV sales growth could become a headwind. OCE expected global EV sales growth to slow 17% in 2024, from an average of 46% a year between 2018 and 2023.

“EV adoption faces challenges from rising trade barriers and supply chain concerns in an environment of ongoing geostrategic competition. The required reorientation in supply chains is likely to slow EV cost declines in major vehicle markets around the world. Policy decisions in major jurisdictions earlier this year have also resulted in weaker vehicle emissions standards.”

In its outlook on 23 April, IEA predicted that global electric car sales could reach 17 million by the end of 2024, up from nearly 14 million in 2023.

Although sales remain predominantly concentrated in China, Europe, and the United States, the agency noted a surge in growth in emerging markets like Vietnam and Thailand. In these countries, electric cars represented 15% and 10% of total car sales, respectively.

Potential Trade Barriers to Limit EV Adoption

The Australian Government’s OCE that EV adoption could face downside risks from potential trade barriers from the United States and Europe against Chinese EVs.

Faced with slowing domestic sales, Chinese EV makers have been ramping up exports. Statista reported, citing data from the China Association of Automobile Manufacturers, that the country’s car exports surged to five million in 2023, from one to two million between 2020 and 2021.

The share of EVs in China’s car exports also increased to 25% in 2023 from 15% in 2021.

The growing exports of EVs from China have sparked concerns in both the United States and Europe. According to the International Energy Agency (IEA), new EV car registrations in Europe and the United States accounted for 25% and 10% of global EV sales, respectively, ranking them second and third after China.

In September, the United States Trade Representative (USTR) announced it increased import duties on several Chinese goods, including Chinese EVs, to 100%, and lithium-ion EV batteries to 25% starting September 27.

In October, the European Commission imposed countervailing duties on imports of BEVs from China for a period of five years.

Based on the decision, BEVs produced by Chinese automaker BYD will be subject to a 17% import duty, Geely 18.8%, SAIC 35.3%, and other Chinese automakers will have to pay a 20.7% import duty.

The Australian Government’s OCE said:

“Both the US and the EU are shifting towards establishing higher trade barriers against rising Chinese EVs exports, which could raise the cost of EVs for consumers and slow adoption.”

Emergence of Alternative Battery Chemistries

The surge in lithium prices and China’s domination of the EV supply chain have encouraged companies to find cheaper EV chemistries, which could potentially reduce the use of lithium in batteries. According to Dutch lender ING, a battery could cost up to 40% of an EV’s value.

Sodium-ion is one of the battery chemistries that does not use lithium and companies are looking to develop it commercially for mass use. Unlike lithium, sodium is abundant and can be found worldwide in brines and rock salt.

Analysts at ING suggest that the widespread availability of sodium could reduce dependence on China, which currently dominates many aspects of the downstream EV battery supply chain, from material processing to the construction of cell and battery components.

The bank said:

“EV supply chains are expanding, but for manufacturing, China remains the key player in the battery and EV component trade.”

It added that China’s dominant role in battery metal supply chains and restrictions in other countries could potentially hinder the adoption of EV batteries.

Meanwhile, companies have begun producing and using sodium-ion batteries.

In November 2023, Swedish company Northvolt announced that it developed a sodium-ion battery. CEO and Co-Founder of Northvolt Peter Carlsson said sodium-ion batteries can be produced using local material and can provide a longer duration of energy storage compared to the conventional NCM and LFP chemistries at lower costs.

On March 6, 2023, The JAC Group’s joint venture with Volkswagen in China announced the release of the world’s first electric vehicle (EV) powered by a sodium-ion battery.

The Australian Government’s OCE said the current versions of sodium-ion batteries have low levels of energy density compared to lithium-ion batteries, as well as lower cycle life.

OCE wrote in its report in June:

“The history of battery technology suggests the performance of sodium-ion batteries may improve alongside other battery technologies. This would allow sodium-ion batteries to follow a similar commercialization pathway to LFP batteries: targeting consumers who prefer a lower cost product with acceptable performance over higher cost and higher performance options.”

However, OCE said sodium-ion batteries will only take a small share of the global EV market over the outlook period.

Lithium Mine Output Sets to Increase Despite Curb

Australia’s Office of Chief Economist expected global lithium production to grow by 20% per year to reach 1.8Mt LCE, despite some miners suspending output to minimize losses amid low prices.

Production growth will come from Australia, China, and Argentina. The agency forecasted China’s share of global lithium production to increase to 25% by 2026 from 23% in 2024. Other sources of growth are Chile, though its share in global production is expected to fall to 13% in 2026, Argentina, and Zimbabwe.

Downside Risk from Potential US-China Trade War Under Trump

Donald Trump’s sweeping victory in the US presidential election on November 4 has reignited concerns over the resumption of the trade war between the world’s two largest economies. During his presidential campaign, Trump had vowed to impose a 60% tariff on all Chinese products.

In the lithium market, while China ranks third as the world’s largest lithium producer, the country dominates lithium processing capacity and EV production. According to ANZ Research data, China produces 60% of EVs in the global market, 80% o--f the lithium-ion batteries that power a large part of that fleet, and 70% of lithium refining capacity.

The International Energy Agency (IEA) projected that China will account for 57% of lithium refining capacity and 23% of lithium mining globally by 2030.

ANZ Research’s Senior Commodity Strategists Daniel Hynes and Soni Kumari wrote in a July note that disruptions of lithium supply from China would mean lithium or lithium-ion batteries would need to be sourced from elsewhere, which would come at additional costs and time.

Hynes and Kumari wrote in their latest lithium price analysis on July 11:

“China’s production of refined lithium sits in the lower quartile of the cost curve, compared to the rest of the world. To stimulate an increase in production outside China, such as in Chile or Argentina, prices would need to be high.”

However, ANZ Research did not expect Trump to immediately impose the 60% tariff in 2025.

“60% tariff or China’s status as Permanent Normal Trade Relation will be key discussion points. We expect the new US administration to bring back the original plan of Trump 1.0,” wrote Chief Economist Greater China Raymond Yeung, Senior China Strategist Zhaopeng Xing, and Economist Vicky Xiao Zhou in a note of November 7.

Lithium Price Forecast 2024

The lithium price forecasts for 2024, gathered by Techopedia, showed a bearish tone due to an anticipated slower adoption of electric vehicles and persistent oversupply, despite producers’ efforts to curb output.

In its lithium price forecast 2024 issued in September, the Australian Government’s Office of the Chief Economist anticipated that the price of lithium hydroxide would average $12,775 per ton, down from its previous estimate of $15,870 per ton for 2024 and from an estimated $51,395 per ton in 2023.

Additionally, it anticipated that the price of spodumene would fall to $1,056 per ton in 2024, a downward adjustment from its earlier forecast of $1,139 per ton and from an estimated $3,812 per ton in 2023.

In September, Fitch Ratings released its latest lithium price projections which lowered its lithium price estimate to an average $12,300/ton for 2024, from the previous estimate of $50,000/ton.

Similarly, Trading Economics also revised downward its forecast for lithium carbonate price in China to 71,391 ($9.856,55) yuan per ton, from its previous projections of 103,395 yuan ($14,275.16) per ton.

Without providing specific lithium price predictions, ANZ Research’s analysts Daniel Hynes and Soni Kumari wrote in a note on November 14 that the slowing expansion of EV sales, combined with surplus battery capacity in China, might dampen demand for battery metals.

Hynes and Kumari said:

“Lithium, cobalt, and nickel look likely to remain oversupplied in the short term, but the response from producers in cutting output amid the low prices should limit the downside.”

Lithium Price Forecast 2025

For 2025, the available lithium price predictions were skewed to the downside, with most sources making a downward adjustment.

Data provider Trading Economics also anticipated that the price of lithium carbonate in China would drop to 70,296 yuan ($9,701.64) in the first quarter of 2025, from 71,391 yuan per ton ($9,856.55) in the fourth quarter of 2024. This was also a downward revision from the 101,301 yuan ($13,962.44) it had estimated earlier for the first quarter of 2025.

For the majority of 2025, Trading Economics’ ??lithium price trend is bearish, with the metal continuing to fall until at least the third quarter of the year.

BMI’s lithium price forecast for 2025 expected the soft, silvery, grey metal to average $20,000/ton, unchanged from its previous forecast.

The Australian Government’s OCE lithium price prediction for 2025, on the other hand, expected the price of lithium hydroxide to trade at an average of $13,485/ton, up from $12,775 projected for 2024. However, OCE’s latest lithium outlook for 2025 in September was a revision from its earlier forecast of rise to $18,393/ton in 2025 released in March.

Australian OCE wrote that the price recovery will be driven by the narrowing surplus following the suspension of some production.

Lithium Price Forecast 2030

What is the long-term outlook for lithium prices? Lithium is not traded in active futures and is primarily traded in spot markets; therefore, anticipating its price in the long run is more difficult. Very few analysts are providing lithium price forecasts for 2030.

The Australian Government’s OCE anticipated the lithium hydroxide price would recover in 2026 as oversupply continues to narrow, although slower adoption of EVs would remain a risk.

According to the OCE, the price of spodumene was expected to rise to $1,167 per ton in 2026, up from the $1,131 per ton estimated for 2026.

As for the price of lithium hydroxide, the OCE expected it would increase to $14,775 per ton in 2026, up from $13,485 per ton in 2025.

However, the OCE September’s projected lithium prices is a downward revision from $18,334 per ton in March.

Fitch Ratings’ future lithium price predictions made in September anticipated that the metal would recover in 2026 and 2027.

The price of lithium per ton was expected to reach $12,000 per ton in 2026, rising to $13,000 in 2027, up from a projected price of $10,300 per ton for 2025.

However, the rating agency’s latest forecast represents a downward revision from its earlier estimate of $13,000 for 2026 and $16,000 for 2027, reflecting weaker EV demand

Fitch Ratings wrote in its lithium price projections on September 11:

“Changes in subsidies, consumer preferences, and automakers’ decisions will continue to affect demand for EVs in the US and Europe. Lithium inventory levels have been increasing with some lithium supply being deferred, but this has not yet been sufficient for prices to recover before 2027.”

The rating agency did not provide a lithium price forecast for the next 5 years.

Without providing numbers, ANZ Research’s Hynes and Kumari were upbeat on the long-term projection of critical minerals, lithium, nickel, and cobalt due to challenges to increase supply. They said:

“We see a strong long-term outlook. Supply still needs to increase 1.5-3.5 times over the next five years, a goal not easily achieved.”

In its latest Commodities Market Outlook, published in October, the World Bank also shared this optimism.

While prices of critical minerals, including lithium, would depressed in the near term, the bank forecasted that prices for critical minerals, including lithium and cobalt, would rise in the coming years as demand—driven by the growing use of energy transition technologies, including EV batteries and other clean, renewable energy technologies—outpaces supply growth.

The Bottom Line

Lithium prices may struggle to recover in the medium term as oversupply in the global battery capacity could persist for some time.

In the long term, while critical minerals, including lithium, will benefit from the continued expansion of EVs and rising demand for renewable energy, the metal’s gain is projected to be limited by the emergence of alternative battery materials.

New materials to power vehicles, such as sodium-ion developed by Northfolt or hydrogen, could reduce lithium usage in batteries.

Remember that forecasters and analysts can and do get their predictions wrong. You should always do your own research to determine whether lithium is a good investment that fits your financial goals.

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