The lithium industry is displaying renewed optimism as increasing demand for battery storage systems begins to counterbalance a recent slowdown in some electric vehicle (EV) markets, industry leaders said at a major conference held this week. The event, regarded as the world’s largest annual meeting for lithium investors, executives, and consumers, drew approximately 1,100 participants—an attendance increase of 10 percent from the previous year.

For years, lithium demand was primarily driven by the growth of electric vehicles. However, recent regulatory adjustments in the United States and other regions have dampened EV sales in key markets. This decline coincided with a period of overproduction within the lithium sector, which contributed to a sharp drop in lithium prices. Since last year’s conference, lithium prices have more than tripled, reflecting shifts in market dynamics.

The sector’s improved outlook is largely attributed to rising requirements for stationary battery storage systems. This surge is fueled by the rapid expansion of artificial intelligence applications and global efforts to reinforce power grids. “Lithium demand in the next two years is going to be much more balanced between EVs and energy storage,” said Jérôme Pécresse, head of Rio Tinto’s aluminum and lithium unit, which has plans to expand lithium production capacity by 2028. Albemarle, the world’s largest lithium producer, echoed this view, highlighting steady growth in the battery storage segment as EV demand remains uneven.

Further signaling increasing market confidence, ioneer announced on Monday that it had signed a letter of intent with Hyundai Engineering and a branch of the South Korean government to advance its lithium project in Nevada. Despite this progress, executives at the conference emphasized the need for greater governmental support to underwrite lithium processing operations. Currently, the processing stage is dominated by low-cost producers in China, raising geopolitical and supply chain concerns.

In a related development, G7 leaders last week agreed to improve coordination among member countries to strengthen Western lithium and nickel markets as part of broader efforts to secure critical mineral supply chains. Industry participants urged policymakers to bolster incentives and infrastructure to support domestic lithium production and processing capacities, aiming to reduce reliance on foreign suppliers amid growing global demand for battery technologies.