Tianqi Lithium CEO: Electric ships and trucks will drive lithium demand beyond current forecasts

```

As the global battle for critical minerals continues to heat up, a warning has been issued by an executive from one of China's largest lithium producers, saying that market forecasts for lithium demand are generally too conservative.

According to a report by the Financial Times on Tuesday, Tianqi Lithium CEO Summer Xia said in an interview that even the most optimistic forecasts for lithium demand underestimate the pace of growth in emerging battery-driven industries. He pointed out that the rapid expansion of electric trucks, mining equipment, and ships has not been fully incorporated into most forecasting models, "which will be a huge incremental increase."

This assessment has direct significance to lithium market investors. Data from the International Energy Agency shows that lithium demand is expected to grow at an average annual rate of about 30% this decade, far higher than approximately 10% during the 2010s.

Forecasts from Wood Mackenzie, Project Blue, Fastmarkets, and Mysteel indicate that global annual lithium demand will jump from 1.1 million tons last year to a range between 3.6 million and 6.3 million tons over the next decade. Wood Mackenzie further predicts that annual demand may exceed 13 million tons by 2050.

Emerging Applications Are a Blind Spot in Demand Forecasts

Xia believes most low-end forecasts are based only on the growth of electric vehicle sales and have not fully taken into account the demand from emerging fields like energy storage, AI data centers, humanoid robots, and drones. He specifically emphasized that electrification in electric trucks, mining equipment, and ships is accelerating, and these areas have large battery demand, which will be a significant incremental factor beyond current predictions.

Meanwhile, he stated that although lithium demand was already showing strong growth before current geopolitical tensions, surging oil prices have further accelerated the transition to electrification—he himself is considering switching his own car to a BYD electric vehicle.

Obstacles to Resource Acquisition

Xia pointed out that many countries, having realized lithium’s central role in the global transition to electric transport, have "closed the door" on mining. This assessment reflects the multiple challenges Tianqi Lithium faces in global resource allocation.

In Australia, Tianqi Lithium co-owns the Kwinana lithium hydroxide plant and one of the world’s largest hard rock lithium mines, Greenbushes, together with local mining company IGO. However, the Kwinana refinery continues to suffer losses; IGO has fully written down its stake and called for closure, showing clear division between the two parties. The Greenbushes project is also under pressure after IGO lowered production guidance this April citing "systematic issues." Australia's tightening of foreign ownership regulations for critical minerals has sharply reduced Tianqi’s possibility of directly owning mines. Xia said the company is willing to support Australian lithium miners financially to secure supply, but wholly owned mines are now difficult to achieve.

Solid-State Battery Deployment to Smooth Profit Cycles

Faced with multiple constraints on resources, Xia said Tianqi is increasing investment in new battery chemistry technologies as well as battery materials recycling and waste processing, focusing in particular on solid-state batteries—a technology route that eliminates the liquid electrolyte used in traditional lithium-ion batteries.

Tianqi owns nearly 10% of Shanghai Aerospace Power Technology and acquired a 2.9% stake in solid-state battery leading startup WeLion New Energy in 2018. It has also set up a joint venture company with WeLion in Shenzhen, holding 58.5% equity.

These deployments are expected to help Tianqi smooth profit volatility, which is highly correlated with lithium price cycles. In 2022, as lithium carbonate prices hit historic highs, the company’s net profit surged to around RMB 24 billion; thereafter, lithium prices fell by more than 80%, and by 2024, losses neared RMB 8 billion. With renewed optimism over AI-driven lithium demand in the market, Tianqi’s Q1 net profit this year rebounded to RMB 1.9 billion.

Xia also commented on the issue of lithium market pricing mechanisms. He pointed out that the gap between futures prices and spot prices continues to widen, squeezing the survival space for midstream companies—they have to purchase raw materials at high prices but sell products to major customers like CATL and BYD at much lower prices. He called for more flexible pricing mechanisms, including linking benchmark prices to futures and introducing index-based pricing, believing this would help stabilize supply and improve profit distribution across the industry chain.

Risk Warning and DisclaimerThe market carries risks; investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment targets, financial situation, or needs of individual users. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investments made based on this content are at your own risk. ```