In the year 2026, I will be paying close attention to the lithium market.
If you’re not typically engrossed in tracking commodity exchanges, I completely understand. (However, the recent reports certainly illustrate that minerals can significantly affect global politics and the economy.)
Nonetheless, lithium is deserving of attention right now.
The element is vital for lithium-ion batteries utilized in smartphones and laptops, electric vehicles, and extensive energy storage systems within the power grid. Prices have experienced considerable fluctuations in recent years, and they are on the rise again following a downturn. The upcoming developments could have substantial consequences for mining and battery innovations.
Before we look forward, let’s briefly revisit the past. In 2020, global electric vehicle (EV) sales began to surge, propelling the demand for lithium used in their batteries. Due to this escalating demand coupled with a constrained supply, prices skyrocketed, with lithium carbonate increasing from below $10 per kilogram to an approximate peak of $70 per kilogram in merely two years.
The technology sector took note of this spike. At those peak moments, there was a surge of interest in creating alternative batteries that didn’t depend on lithium. I was covering sodium-ion batteries, iron-air batteries, and even experimental varieties that were constructed with plastic.
Researchers and startups were actively seeking alternative methods to acquire lithium, such as battery recycling and techniques like direct lithium extraction (more on this shortly).
However, prices soon fell back down. We encountered lower-than-anticipated demand for EVs in the United States, and developers increased mining and processing efforts to align with the demand. By late 2024 and into 2025, lithium carbonate hovered around $10 a kilogram once more. The urgency to avoid lithium or discover new methods to obtain it suddenly appeared much less pressing.
Now, we arrive at the present: lithium prices are on the upswing once more. Currently, they are far from the dramatic increases observed a few years back, but analysts are observing closely. Robust growth in EV sales within China is significantly influencing this—EVs currently account for approximately 75% of battery demand. Additionally, advancements in stationary storage, particularly batteries for the grid, are also boosting lithium demand in both China and the United States.
Heightened prices could foster new opportunities. These could encompass alternative battery chemistries, especially sodium-ion batteries, as stated by Evelina Stoikou, head of battery technologies and supply chains at BloombergNEF. (I’d like to mention that we recently included sodium-ion batteries on our 2026 list of 10 Breakthrough Technologies.)
It isn’t solely about batteries, however. Another industry that might undergo significant transformations due to a lithium price fluctuation is extraction.
At present, most lithium is extracted from ores, primarily in Australia, before being shipped to China for refinement. There’s a rising initiative to process the mineral in additional countries, as nations strive to establish their own lithium supply chains. Tesla has recently announced the commencement of operations at its lithium refinery in Texas, which began construction in 2023. If prices continue to rise, we may observe increased investments in processing facilities outside of China.
This could also be a pivotal year for direct lithium extraction, as noted by Katie Brigham in a recent article for Heatmap. This technology employs chemical or electrochemical methods to extract lithium from brine (saline water typically sourced from salt lakes or underground reserves), efficiently and cost-effectively. Companies like Lilac Solutions, Standard Lithium, and Rio Tinto are making plans or commencing construction on commercial plants this year in the United States and Argentina.
If there’s one thing I’ve gathered from following the developments in batteries and minerals over the past years, it’s that forecasting the future is an impossible task. Nevertheless, if you’re seeking indicators to observe, lithium prices are certainly worth scrutinizing.
This article is from The Spark, MIT Technology Review’s weekly climate newsletter. To receive it in your inbox every Wednesday, sign up here.
