Why 2026 is a hot year for lithium | MIT Technology Review

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Skip to ContentMIT Technology ReviewFeaturedTopicsNewslettersEventsAudioMIT Technology ReviewFeaturedTopicsNewslettersEventsAudioClimate change and energyWhy 2026 is a hot year for lithiumThis metal is one to watch for the battery and mining industries.
By Casey Crownhartarchive pageJanuary 22, 2026Getty Images In 2026, I’m going to be closely watching the price of lithium. If you’re not in the habit of obsessively tracking commodity markets, I certainly don’t blame you. (Though the news lately definitely makes the case that minerals can have major implications for global politics and the economy.) But lithium is worthy of a close look right now. The metal is crucial for lithium-ion batteries used in phones and laptops, electric vehicles, and large-scale energy storage arrays on the grid. Prices have been on quite the roller coaster over the last few years, and they’re ticking up again after a low period. What happens next could have big implications for mining and battery technology.
Before we look ahead, let’s take a quick trip down memory lane. In 2020, global EV sales started to really take off, driving up demand for the lithium used in their batteries. Because of that growing demand and a limited supply, prices shot up dramatically, with lithium carbonate going from under $10 per kilogram to a high of roughly $70 per kilogram in just two years. And the tech world took notice. During those high points, there was a ton of interest in developing alternative batteries that didn’t rely on lithium. I was writing about sodium-based batteries, iron-air batteries, and even experimental ones that were made with plastic.
Researchers and startups were also hunting for alternative ways to get lithium, including battery recycling and processing methods like direct lithium extraction (more on this in a moment). But soon, prices crashed back down to earth. We saw lower-than-expected demand for EVs in the US, and developers ramped up mining and processing to meet demand. Through late 2024 and 2025, lithium carbonate was back around $10 a kilogram again. Avoiding lithium or finding new ways to get it suddenly looked a lot less crucial. Related StoryThis company is planning a lithium empire from the shores of the Great Salt LakeRead next That brings us to today: lithium prices are ticking up again. So far, it’s nowhere close to the dramatic rise we saw a few years ago, but analysts are watching closely. Strong EV growth in China is playing a major role—EVs still make up about 75% of battery demand today. But growth in stationary storage, batteries for the grid, is also contributing to rising demand for lithium in both China and the US. Higher prices could create new opportunities. The possibilities include alternative battery chemistries, specifically sodium-ion batteries, says Evelina Stoikou, head of battery technologies and supply chains at BloombergNEF. (I’ll note here that we recently named sodium-ion batteries to our 2026 list of 10 Breakthrough Technologies.) It’s not just batteries, though. Another industry that could see big changes from a lithium price swing: extraction. Today, most lithium is mined from rocks, largely in Australia, before being shipped to China for processing. There’s a growing effort to process the mineral in other places, though, as countries try to create their own lithium supply chains. Tesla recently confirmed that it’s started production at its lithium refinery in Texas, which broke ground in 2023. We could see more investment in processing plants outside China if prices continue to climb. This could also be a key year for direct lithium extraction, as Katie Brigham wrote in a recent story for Heatmap. That technology uses chemical or electrochemical processes to extract lithium from brine (salty water that’s usually sourced from salt lakes or underground reservoirs), quickly and cheaply. Companies including Lilac Solutions, Standard Lithium, and Rio Tinto are all making plans or starting construction on commercial facilities this year in the US and Argentina.  If there’s anything I’ve learned about following batteries and minerals over the past few years, it’s that predicting the future is impossible. But if you’re looking for tea leaves to read, lithium prices deserve a look.  This article is from The Spark, MIT Technology Review’s weekly climate newsletter. To receive it in your inbox every Wednesday, sign up here. by Casey CrownhartShareShare story on linkedinShare story on facebookShare story on emailPopular10 Breakthrough Technologies 2026Amy NordrumThe great AI hype correction of 2025Will Douglas HeavenChina figured out how to sell EVs. Now it has to deal with their aging batteries.Caiwei ChenThe 8 worst technology flops of 2025Antonio RegaladoDeep DiveClimate change and energyChina figured out how to sell EVs. Now it has to deal with their aging batteries.As early electric cars age out, hundreds of thousands of used batteries are flooding the market, fueling a gray recycling economy even as Beijing and big manufacturers scramble to build a more orderly system.
By Caiwei Chenarchive pageSodium-ion batteries: 10 Breakthrough Technologies 2026A cheaper, safer, and more abundant alternative to lithium is finally making its way into cars—and the grid.
By Caiwei Chenarchive pageThis Nobel Prize–winning chemist dreams of making water from thin airOmar Yaghi thinks crystals with gaps that capture moisture could bring technology from “Dune” to the arid parts of Earth.
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Lithium’s trajectory in 2026 presents a complex scenario shaped by evolving demand and strategic shifts within the battery and mining industries. As outlined by Casey Crownhart, the year is anticipated to be marked by a renewed focus on lithium prices, driven primarily by robust EV growth in China—representing approximately 75% of current battery demand—and a burgeoning demand for stationary energy storage solutions across both China and the United States. This surge in demand, coupled with a rising interest in grid-scale battery technologies, is fueling a price inflection point, prompting deeper analysis and strategic adjustments throughout the supply chain.

The period leading up to 2026 witnessed a significant price spike in lithium carbonate, peaking around $70 per kilogram in 2021, spurred by rising EV adoption and limited supply. This volatility triggered a period of reduced demand expectations, coupled with increased mining and processing efforts. However, the emergence of new market dynamics, notably China’s dominance in EV sales and the increasing need for energy storage solutions, has led to a resurgence in lithium’s price sensitivity.

Several key developments are poised to influence this landscape. First, the continued expansion of EV production, particularly in China, maintains upward pressure on lithium demand. Second, the growing adoption of stationary battery storage systems for the grid—a strategic imperative for managing intermittent renewable energy sources—is creating a new market for lithium-ion batteries and, consequently, increasing lithium demand. Third, the potential for increased prices is directly linked to established alternatives such as sodium-ion batteries, which, according to Evelina Stoikou at BloombergNEF, are seen as a critical avenue for diversification.

The strategic response to these dynamics is multi-faceted. Existing players like Tesla’s establishment of a lithium refinery in Texas represents a move towards geographically diversified supply chains. Further investment in processing plants, particularly outside of China, is anticipated as companies seek to reduce reliance on a single source and gain greater control over the supply chain. The direct lithium extraction (DLE) technology, highlighted as a significant advancement by Katie Brigham, is expected to play a critical role in meeting growing demand through expedited and potentially more sustainable extraction methods from brine resources—particularly in the US (Lilac Solutions, Standard Lithium) and Argentina.

Furthermore, the dynamic between lithium and alternative battery chemistries, specifically sodium-ion, is central to the market’s evolution. Sodium-ion batteries are recognized as a viable, cheaper, and more abundant alternative, and their adoption is likely to intensify as lithium prices rise, driving further innovation in this area.

The established trends surrounding lithium mining, coupled with technological advancements like DLE, and the exploration of alternative battery chemistries, suggest that 2026 will be a pivotal year for the metal’s market. The interplay between supply, demand, and technological innovation will determine the ultimate trajectory of lithium’s price and its role as a fundamental component within the evolving landscape of energy storage and electric vehicle technology.