Trump’s EV Policy Reversal Unlikely to Lower Mineral Demand

Experts predict that Trump's rollback of electric vehicle targets may temporarily slow lithium demand but will unlikely affect global mining industry growth.

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U.S. President Donald Trump’s decision to roll back electric vehicle (EV) targets may temporarily reduce demand for lithium and other essential minerals. However, analysts and industry experts assert that this move is unlikely to significantly impact the mining sector due to the rising global demand for EVs.

On January 20, Trump revoked a 2021 executive order from his predecessor, Joe Biden, which aimed to ensure that 50% of all new vehicles sold in the U.S. by 2030 would be electric. This revocation comes as automakers have been strategizing for an anticipated increase in EV demand that stemmed from Biden’s initiative.

Following the announcement, shares of Japanese automakers, South Korean battery manufacturers, and lithium miners from Australia, the U.S., and China experienced declines. Despite these fluctuations, experts believe that even if demand for EVs slows in the U.S., growth in other markets, particularly in China, will offset this decline.

“Every time people take away subsidies or benefits … it’s a dent to the demand scenario,” said analyst Glyn Lawcock at Barrenjoey, an Australian investment bank. “(But) ultimately demand will still grow even if the U.S. is a bit slower under Trump.”

Australian lithium producer Liontown Resources said the global transition to EVs was underway, with or without the United States.

“Longer term, I just don’t think it will be an issue on demand,” Antonino Ottaviano, Liontown’s CEO, said on a Tuesday analyst call.

Executives from the Australian lithium producer Liontown Resources emphasized that the global transition towards electric vehicles is already in motion, independent of U.S. developments. They estimated that China alone accounted for 65% of the global EV market, with significant sales growth also occurring elsewhere.

Meanwhile, the rest of the world already accounts for 1.3 million EV 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, the Liontown executives added.

Source: Reuters

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