(Paragraph 8 corrects the North American share of the global electric vehicle market to 10% from 20%).
By Melanie Burton and Ernest Scheyder
(Reuters) – U.S. President Donald Trump’s rollback of electric vehicle goals could temporarily slow demand for lithium and other critical minerals, but is unlikely to threaten the mining industry amid growing global demand for electric vehicles, analysts and industry executives said.
On Tuesday, Trump rescinded predecessor Joe Biden’s 2021 executive order that sought to ensure that half of all new vehicles sold in the US by 2030 would be electric. Automakers were poised for a surge in demand for electric vehicles largely thanks to Biden’s move.
Trump’s order caused shares of Japanese automakers, South Korean battery makers and Australian, American and Chinese lithium miners to fall. But even if demand for electric vehicles cools in the world’s second-largest auto market, analysts and experts expect it to be more than offset by demand elsewhere.
Trump also planned other regulatory changes to end support for electric vehicles and charging stations. It also aims to strengthen measures to block imports of cars and battery materials from China.
“Any time people take away subsidies or benefits … it’s a blow to the demand scenario,” said analyst Glyn Lawcock of Barrenjoey, an Australian investment bank. “(But) ultimately demand will continue to grow even if the U.S. is a little slower under Trump.”
Australian lithium producer Liontown Resources (ASX:) said the global transition to electric vehicles is underway, with or without the United States.
“Long-term, I just don’t think it’s going to be an on-demand issue,” Antonino Ottaviano, Liontown’s chief executive officer, said on a call with analysts on Tuesday.
Much of the EV industry’s growth is occurring in China, which accounts for 11 million sales or 65% of the market, compared to North America, which accounts for 10% of the market, Liontown executives said on the call.
Meanwhile, the rest of the world already has 1.3 million electric vehicle sales and is growing 27% annually, a trajectory that will prove more significant than the entire North American market in less than two years, Liontown executives added.
That growth potential is something Chinese electric vehicle manufacturers are chasing as they are shut out of the U.S. market by Biden’s 100 percent tariffs on electric vehicles.
For example, grid batteries that store days of electricity are becoming increasingly popular around the world. Critical metals are also used to make many consumer electronics, as well as the computer servers needed to power the artificial intelligence industry.
Albemarle (NYSE: ), the world’s largest lithium company, declined to comment on Trump’s order.
Arcadium, the lithium producer to be acquired by Rio Tinto (NYSE: ) and the International Lithium Association trade group, was not immediately available for comment.
Rio Tinto also declined to comment on Trump’s order, but its CEO Jakob Stausholm told the World Economic Forum on Tuesday that he was optimistic about the white metal.
“The demand for lithium is likely to grow another fivefold in the next 15 years, so a lot more lithium projects will have to be built,” Stausholm said at a forum in Davos, Switzerland, adding that he has owned an electric vehicle for more than nine years.
“It’s just a better car” than an internal combustion engine, Stausholm added.
David Klanecky, CEO of private battery recycling company Cirba Solutions, expects demand for the critical mineral in the U.S. to soar by 2030 due to demand not just for electric vehicles, but for a myriad of electronics.
Barring any targeted withdrawal, miners said they believed measures to wean Western producers off Chinese supplies would bolster support for their metals.
“We expect that measures taken to build supply chain independence from China … will have a much greater impact than withdrawing the formal target for EV sales,” said Darryl Cuzzubbo, chief executive of Australian rare earth developer Arafura.
“There is a tipping point for electric vehicles where targets and incentives will not be needed to drive take-up.”
