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Trump's EV order not seen slowing critical metals demand

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Global EV demand on the rise, especially in China

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Lithium industry executives bullish on growth prospects

By Melanie Burton and Ernest Scheyder

Jan 21 (Reuters) -

U.S. President

Donald Trump's rollback of electric vehicle targets may

temporarily slow demand for lithium and other critical minerals,

but is unlikely to hamper the mining industry amid surging

global EV demand, analysts and industry leaders said.

Trump on Tuesday revoked predecessor Joe Biden's 2021

executive order that sought to ensure half of all new vehicles

sold in the U.S. by 2030 are electric. Automakers had been

positioning for a jump in EV demand due largely to that Biden

move.

Trump's order caused shares of Japanese automakers,

South Korean battery makers and Australian, U.S. and Chinese

lithium miners to slip. But even if EV demand cools in the

world's second-biggest auto market, analysts and industry

experts expect traction elsewhere to more than compensate.

Trump has planned other regulatory changes to cut off

support for EVs and charging stations. He also aims to

strengthen measures blocking imports of automobiles and battery

materials from China.

"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 ( LINRF )

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.

Much of the EV industry's growth happens in China,

accounting for 11 million sales or 65% of the market, compared

with North America, which accounts for 20% of the market,

Liontown executives said on the call.

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.

That growth potential is something Chinese EV manufacturers

are chasing given they are locked out of the U.S. market due to

100% EV tariffs imposed by Biden.

Grid-scale batteries that store days' worth of electricity

are rising in popularity across the world, for example. Critical

metals are also used to build many consumer electronics as well

as computer servers needed to power the artificial intelligence

industry.

Albemarle, the world's largest lithium company,

declined to comment on Trump's order.

Arcadium, a lithium producer about to be bought

by Rio Tinto and the International Lithium Association

trade group, was not immediately available for comment.

Rio Tinto also declined to comment on Trump's order, but its

CEO Jakob Stausholm told the World Economic Forum on Tuesday

that he is bullish on the white metal.

"Lithium demand will probably go up another five times over

the next 15 years, so a lot more lithium projects will have to

be built," Stausholm told the forum in Davos, Switzerland,

adding that he has owned an EV for more than nine years.

"It's just a better car" than an internal combustion

engine, Stausholm added.

David Klanecky, CEO of privately held battery recycler

Cirba Solutions, expects U.S. demand for critical minerals to

jump by 2030 due to the demand not just for EVs, but for myriad

electronics.

Beyond any target rollbacks, miners said they believe

measures to wean Western manufacturers off Chinese supplies

will underpin support for their metals.

"We expect measures taken to build supply chain independence

from China ... to have a much greater impact than the rollback

of a formal target for EV sales," said Darryl Cuzzubbo, CEO of

Australian rare earths developer Arafura.

"There is a tipping point looming for electric vehicles at

which targets and incentives won't be required to encourage

take-up."