Yes, lithium prices have been falling due to significant oversupply from new projects but are expected to see a recovery by late 2026 as demand from electric vehicles (EVs) and energy storage grows, although battery costs continue to decrease due to manufacturing efficiencies and cheaper materials. The current market faces a "lithium paradox" where intense supply growth outpaces demand, squeezing producer margins, but long-term demand from the energy transition should drive prices back up.
Lithium prices have fallen steadily since the highs reached at the end of 2022, reaching a low in mid-June this year of below $7,500/t cif China for lithium carbonate. Fears of oversupply, uneven electric vehicle (EV) uptake and trade tariffs weakened sentiment over the two-and-a-half year period.
Lithium Market Turns Bullish:1 Prices are rising again in 2025 as EV demand, inventory drawdowns and tighter regulations, especially in China, strengthen the market. Lithium's Use Cases Expand: Data centers are rapidly adopting lithium-ion batteries for higher efficiency and reliability.
Australia's lithium export earnings are forecast to increase from over $4.8 billion in 2024–25 to over $6.1 billion in 2026–27, driven by modest growth in lithium hydroxide export volumes and prices. Global lithium demand is forecast to grow by almost 15% a year to 2027.
BNEF: Lithium-ion battery pack prices fall to $108/kWh, stationary storage becomes lowest price segment. According to BNEF, battery pack prices for stationary storage fell to $70/kWh in 2025, a 45% decrease from 2024.
Yes, Warren Buffett's company, Berkshire Hathaway, is actively investing in lithium production through a joint venture with Occidental Petroleum (OXY) to extract it from geothermal brine in California, aiming for a domestic supply for the EV market, even though he's traditionally avoided direct lithium mining stocks. They are using advanced Direct Lithium Extraction (DLE) technology to turn a byproduct of geothermal energy into valuable battery-grade lithium.
Canaccord forecasts lithium demand rising by around 15% to ~1.5 million tonnes (Mt) lithium carbonate equivalent ("LCE") by the end of 2026, with growth split roughly 60% BESS and 40% EVs, materially tightening the market versus prior expectations [3].
Investment Summary
Lithium remains a boom-bust commodity. While higher prices reduce downside risk and improve project economics, they also incentivise a supply response from Australian hard-rock producers, South American brine operations, and suspended Chinese production, which is likely to cap sustained upside.
Construction. The building and construction industry is one of the largest sectors in Australia. The sector is forecast to grow 3% each year from 2024 to 2027 supported by a $15.5 billion government investment in infrastructure from the 2023-24 Budget.
Sodium-Ion Batteries
Sodium is far more abundant than lithium, paving the way for a cost-efficient alternative.
After a turbulent 2025 marked by oversupply and price drops, a lithium rebound is underway. Experts believe 2026 could be a year of rebalancing, driven by energy storage and geopolitical shifts.
The 80/20 rule for lithium batteries recommends keeping the charge level between 20% and 80% for daily use to significantly extend battery life by reducing stress on the electrodes, avoiding the strain of extreme highs (100%) and lows (0%). While charging to 100% is fine for occasional long trips, daily charging to 80% and avoiding discharge below 20% minimizes degradation from high voltages and deep cycles, leading to more total energy delivered over the battery's life.
2025: US$12,500 per tonne. 2026: US$14,275 per tonne. 2027: US$16,146 per tonne. 2028: US$17,327 per tonne.
Lithium prices fell primarily due to a significant oversupply caused by new mines coming online and high inventories, coupled with slower-than-expected electric vehicle (EV) demand growth, which created a market correction after a massive price boom peaking in 2022, squeezing miners despite ongoing EV adoption and energy storage needs.
The Dramatic Fall from Record Highs. Lithium has experienced an extraordinary boom-and-bust cycle that's tested even the most resilient investors. From peak prices exceeding US$80,000/t in 2022, lithium carbonate has plummeted approximately 89% to around US$9,000/t by mid-2025.
Global lithium demand will grow by 17% to 30% in 2026 while supply is expected to rise by 19% to 34%, according to a range of forecasts by four analysts, who declined to be identified as they are not authorised to speak to media.
Turning $5,000 into over $400,000 requires significant time, consistent investing (especially in growth assets like stocks/ETFs), and the magic of compound interest, potentially combined with regular additional contributions. Key strategies include starting early, investing in diversified portfolios (like index funds), reinvesting dividends, and staying disciplined for decades, as this growth happens exponentially over the long term.
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Yes, Warren Buffett's company, Berkshire Hathaway, is actively investing in lithium production through a joint venture with Occidental Petroleum (OXY) to extract it from geothermal brine in California, aiming for a domestic supply for the EV market, even though he's traditionally avoided direct lithium mining stocks. They are using advanced Direct Lithium Extraction (DLE) technology to turn a byproduct of geothermal energy into valuable battery-grade lithium.
The demand for lithium is expected to continue to grow in the coming years. By investing in lithium-related stocks, you may be able to benefit that increasing demand for this commodity has on its price.
5 Best-performing ASX Lithium Stocks (Updated January 2026)
Several key players in the Australian lithium sector are showing strong recovery momentum in 2025, though with varying degrees of resilience based on their operational status, diversification, and financial strength.
If oil was the blood of 20th-century civilization, then lithium is the pulse of the 21st. Known as “white gold,” this lightweight mineral is the irreplaceable component in the batteries that power everything from smartphones to electric vehicles (EVs).
China's the largest consumer of lithium because of its booming electronics and electric vehicle industries.