Lithium, Cobalt, Nickel: What the Latest Forecast Says About Metal Demand in the Electric Vehicle Market in 2025

The electric vehicle market is growing at an unprecedented rate, with global sales expected to reach over 13 million units by 2025, according to the International Energy Agency. This rapid growth has brought with it an unparalleled surge in demand for lithium, cobalt, and nickel-three critical metals used in EV battery fabrication. In this blog, we touch on the most recent trends in demand for lithium, cobalt, and nickel-what the future might hold for the electric vehicle market in 2025-and go through the latest data from industry leading resources such as SMM for vital price, market condition, and demand forecasts of these metals.

Lithium: The Heart of the EV Battery

The Surge in Lithium Demand

Lithium is a key material in rechargeable lithium-ion batteries used in electric vehicles on a large scale. According to SMM, the price of 99.5% battery-grade lithium carbonate jumped to USD 9,276.48/mt on January 15, 2025, up 84.9% compared with the previous day. The SMM Lithium Carbonate Index even went up to USD 9,261.55/mt, which again reflected the height of lithium prices associated directly with supply and demand from the EV market.

With production ramped up, demand for lithium is expected to soar. In fact, lithium carbonate demand has already reached 850,000 mt LCE in 2024, up 44% year over year, according to SMM's latest figures. With major automakers Tesla, BYD, and Volkswagen producing units with vigor, lithium suppliers just can't produce this much-needed metal fast enough.

Lithium Supply Chain Issues

Despite the obvious surge in demand, lithium production has been plagued by a number of factors. China, which dominates the global lithium market, has increased its cost for the extraction and production of raw materials. According to the SMM Lithium Hydroxide Procurement Strategy Report, annual lithium carbonate imports jumped by 46% year-over-year, indicating high reliance on imported raw materials. With such huge demand and an inability to meet that demand with supply, this is expected to continue driving the prices of lithium upward into 2025.

Lithium 2025 Outlook

Demand for lithium, due to global electrification ambitions and EV scaling, is expected to continue to increase through 2025. According to SMM, lithium supplies will likely be tight globally, producing pricing volatility plus potential supply chain risks. EV battery companies can hedge identified risks through long-term contracts, diversified supplies.

Cobalt: Making Possible the Safety and Performance of the Battery

Cobalt's Crucial Role in EV Batteries

Cobalt, a key ingredient for lithium-ion batteries, helps to stabilize the energy density and safety of the battery.

Its price might have seesawed these few years, but it continues being very important in cathodes of electric vehicle batteries. As of Jan. 15, 2025, SMM prices the average for refined cobalt at USD 19,684.68/mt, down by 179.24 from the previous day. Whatever ups and downs it had gone through or is going through, demand for cobalt will definitely rise as this remains the choice of carmakers to improve their battery performance.

The Democratic Republic of Congo is the leading country in the production of cobalt and provides a high share, at about 60%, to the entire world supply. In DRC, there are ethical mining issues regarding child labor and very unsafe working conditions. This situation has raised several calls for action from car manufacturers; General Motors and BMW promised to source cobalt that doesn't involve conflict.

The current shift toward more ethical sourcing is pushing for greater supply chain transparency and leading to an increased interest in cobalt recycling and alternative technologies. Companies like Tesla are working to develop nickel-cobalt-aluminum (NCA) batteries in their effort to reduce dependence on cobalt and further improve overall battery performance.

Outlook for Cobalt in 2025

Demand for cobalt is expected to remain solid into 2025, with nearly all major automobile companies having pledged to ramp up production of EVs. All the supply chain risks and challenges with responsible sourcing will make producers use cobalt in a far more sustainable way. According to SMM, there may also likely be more emphasis on alternatives to cobalt and the recycling of cobalt from spent batteries, part offsetting some supply constraints.

Nickel: The Critical Building Block for High-Energy-Density Batteries

Nickel in EV Battery Manufacturing

The other significant metal for the production of lithium-ion batteries, specifically high-energy-density batteries for EVs, is nickel. According to SMM, on January 15, 2025, the average price of SMM 1 nickel was USD 15,518.99/mt, slightly down from the previous day. Despite such fluctuations, nickel is one of those metals contributing immensely to huge demand in fulfilling the rising requirements of energy storage for electric vehicles.

This is in particular the case for the manufacturing of nickel-rich cathodes that offer higher energy density and range for EVs. The increasing trend toward nickel-based battery chemistries such as NCM (Nickel-Cobalt-Manganese) and NCA (Nickel-Cobalt-Aluminum) is driving high demand for high-purity nickel.

Nickel Supply and Demand Outlook

Demand for nickel will rise steadily, and nickel sulfate is bound to become popular as the most sought-after form of nickel for EV battery manufacturing. SMM's Nickel Industry Chain Annual Report predicted continued growth in nickel sulfate demand due to EV industry expansion and transition to bigger and stronger batteries.

Yet, all is not that smooth in the supply chain of nickel. The nickel mining sector has been recording slow production growth, and at the same time, high-purity class nickel has become increasingly costly to mine. According to SMM, on the back of tight supply conditions, the price of nickel salts increased slightly in early 2025. Up to 2025, supply for nickel will continue to be tight; and as these imbalances remain between supply and demand, that may cause price increases in both nickel sulfate and nickel metal.

Outlook for Nickel in 2025

As more and more automobile manufacturers shift to electric vehicles, the demand for nickel will keep on growing. By the year 2025, demands for batteries' nickel will outstrip their supply, so price volatility may be here to stay. Therefore, enterprises that depend upon nickel should work out long-term contracting and explore various sources of alternative supplies, such as recycled nickel.

The Role of SMM in Monitoring the Lithium, Cobalt, and Nickel Markets

This paper is going to look at an all-inclusive perspective in terms of insight into lithium, cobalt, and nickel markets from SMM, China's leading provider of metals intelligence. The participants in the market will leverage comprehensive market reports, price indices, and forecasting tools for prudent decisions regarding procurement.

Market Trend, Supply-Demand Dynamics, Price Forecast-depth and breadth of data in SMM's Lithium Hydroxide Procurement Strategy Report and Nickel Industry Procurement Strategy Report make sure the business is always on par with the latest information it needs.

Why Choose SMM for Lithium, Cobalt and Nickel Insights?

With over 100 analysts in lithium, cobalt, nickel, and many other industries, SMM provides unparalleled industry intelligence. Its Database Pro and Metals Industry Database provide real-time access to 15,000+ metal prices and 150,000+ databases respectively and are a must-have for anyone in the metals supply chain.

Conclusion: Metal Demand in 2025 and Beyond

In an accelerating electric vehicle market, the demand for lithium, cobalt, and nickel will be on the rise. Until 2025, these metals are forecasted to keep being in essential demand for battery production in view of the increasing supply chain constraints and price volatility. Industry players should be aware of the shifting landscape in this marketplace and reconsider purchasing strategies to investigate new opportunities within recycling and alternative sources that can help to lower risk.

Being one of the leading sources of metals intelligence, SMM is a trusted partner in guiding the company through the complexities of the market and in finding the most appropriate way to procure supplies of the necessary metals with minimum losses.