Lithium is becoming more hopeful about a market recovery. Experts say that the growing demand for battery storage systems is partially balancing slower EV market growth. For many years, EVs were the primary driver of increased lithium demand. However, changes in government policies, especially in the United States, have slowed EV sales in some important markets. At the same time, increased lithium supply alongside lower demand contributed to a sharp decline in its prices.”
Now, demand for large battery storage systems is growing quickly. These batteries are used to store electricity for power grids and support the growing energy needs of artificial intelligence (AI) data centres. According to Fastmarkets CEO Raju Daswani, demand for lithium used in battery storage systems is increasing by about 40% every year. He said energy storage has become a major growth driver for the lithium market and provides more stable demand than EVs.
Industry leaders at a major lithium conference in Las Vegas said the market situation is much better than last year. Lithium prices have more than tripled since the 2025 conference. Rio Tinto and Albemarle, two major lithium companies, said battery storage demand is growing steadily worldwide. They believe lithium demand will soon be more evenly shared between EVs and energy storage systems.
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Despite the positive outlook, industry executives are asking governments to provide more support for lithium processing outside China, which currently dominates the sector. They say stronger government backing is needed to secure reliable supplies of lithium and other critical minerals in the future.
