Written by Melanie Burton and Ernest Scheider
(Reuters) – U.S. President Donald Trump’s rollback of electric vehicle goals may temporarily slow demand for lithium and other important metals, but is unlikely to hamper the mining industry amid rising global demand for electric vehicles, analysts and industry leaders said.
Trump on Tuesday rescinded his predecessor Joe Biden’s 2021 executive order that sought to ensure that half of all new cars sold in the United States by 2030 would be electric. Automakers were bracing for a jump in demand for electric vehicles due in large part to Biden’s move.
Trump’s order caused shares of Japanese automakers, South Korean battery makers, and Australian, American and Chinese lithium mining companies to decline. But even if demand for electric vehicles declines in the world’s second-largest auto market, analysts and industry experts expect traction elsewhere to more than compensate.
Trump plans to make other regulatory changes to cut subsidies for electric vehicles and charging stations. It also aims to strengthen measures preventing imports of automobiles and battery materials from China.
“Every time people remove support or benefits… it impacts the demand scenario,” said Glenn Lowcock, an analyst at Australian investment bank Baringway. “(But) ultimately demand will continue to grow even if the U.S. is a little slower under Trump.”
The global shift to electric vehicles is underway, with or without the United States, Australian lithium producer Liontown Resources (ASX) said.
“Long term, I don’t think it will be an on-demand issue,” Liontown CEO Antonino Ottaviano said in a phone call Tuesday.
Liontown executives said during the call that most of the electric vehicle industry’s growth is occurring in China, where it accounts for 11 million sales or 65% of the market, compared to North America, which accounts for 20% of the market.
Meanwhile, the rest of the world already accounts for 1.3 million EV sales and is growing 27% year-over-year, a trajectory that will make it more important than the entire North American market in less than two years, Liontown executives added.
This growth potential is something Chinese EV manufacturers are seeking to realize given that they are blocked from entering the US market due to the 100% tariffs on EVs imposed by Biden.
For example, grid-scale batteries that store enough electricity for days are becoming increasingly popular around the world. Critical minerals are also used in the construction of many consumer electronic devices as well as the computer servers needed to power the AI industry.
Albemarle (NYSE:), the world’s largest lithium company, declined to comment on Trump’s order.
Arcadium, a lithium producer about to be acquired by Rio Tinto (NYSE:) and the International Lithium Association trade group, could not immediately be reached for comment.
Rio Tinto also declined to comment on Trump’s order, but its CEO Jacob Stasholm told the World Economic Forum on Tuesday that he was optimistic about the white metal.
“Demand for lithium will probably rise another five times over the next 15 years, so a lot of lithium projects will have to be built,” Stasholm told the forum in Davos, Switzerland, adding that he has owned an electric car for more than nine years. .
“It’s just a better car” than the internal combustion engine, Stasholm added.
David Kalanicki, CEO of privately held battery recycling company Cirba Solutions, expects U.S. demand for critical metals to jump by 2030 due to demand not only for electric vehicles, but also for countless electronics.
Far from any targeted decline, miners said they believed measures to wean Western manufacturers away from Chinese supplies would boost support for their minerals.
“We expect actions taken to build supply chain independence from China to have a much greater impact than falling short of the official electric vehicle sales target,” said Darryl Cozbo, CEO of Australian rare earths developer Arafura.
“There is a tipping point on the horizon for electric vehicles where targets and incentives will no longer be needed to encourage uptake.”