Demand for critical minerals could slow after Trump's decision not to support electric vehicles
US President Donald Trump's rollback of electric vehicle targets could temporarily slow demand for lithium and other critical minerals, but is unlikely to hamper the mining industry amid rising global demand for electric vehicles, analysts and industry executives said.
Trump revoked predecessor Joe Biden's 2021 executive order, which sought to ensure that half of all new vehicles sold in the U.S. by 2030 were electric. Automakers had been positioning themselves for a surge in demand for these vehicles largely due to Biden's move.
Trump's order sent shares of Japanese automakers, South Korean battery makers and Australian, American and Chinese lithium mining companies plunging. But even if demand for electric vehicles shrinks in the world's second-largest auto market, analysts and industry experts expect the pullback elsewhere will more than compensate.
Trump has planned other regulatory changes to cut off subsidies for electric vehicles and charging stations. He also intends to strengthen measures blocking imports of automobiles and battery materials from China.
Most of the growth in the electric vehicle industry is recorded in China, accounting 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 has 1.3 million electric vehicle sales and is growing at 27% year-on-year, a trajectory that will see it become more meaningful than the entire North American market in less than two years.
This growth potential is something that Chinese electric vehicle manufacturers are pursuing as they are locked out of the US market due to the 100% electric vehicle tariffs imposed by Biden.
Critical minerals are also used to produce many consumer electronics devices, as well as computer servers needed to power the artificial intelligence industry.
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