Truflation EV Commodity Index for April 22, 2026

New lithium and nickel mining projects are set to significantly increase supply by 2025-2026, aiming to meet robust electric vehicle (EV) sector demand. Analysts such as Benchmark Mineral Intelligence and Fastmarkets forecast strong EV growth, with global EV sales reaching 1.75 million units in March 2026 alone, underscoring the ongoing need for battery metals ^[3]. This resurgence in EV sales is anticipated to uplift the overall outlook for battery materials ^[4]. While specific aggregated figures comparing new output to comprehensive demand forecasts are not fully detailed, the consensus is that new supply is crucial to support sustained high growth in EV demand ^[5]. The market's stability and potential price volatility will depend heavily on the speed of project ramp-ups and any shifts in demand, with timely project commissioning and successful ramp-ups being key factors.

Key lithium and nickel projects are advancing supply additions. For lithium, the Thacker Pass project is actively developing, with 2026 capital expenditure guidance already provided ^[1]. Additionally, the Sal de Vida project is progressing to add to future lithium availability ^[6]. In the nickel sector, Indonesia is projected to substantially boost its supply by 2026 due to new capacity additions ^[2]. However, discussions about potential production cuts at operations like Weda Bay could influence the 2026 market outlook for nickel ^[7].

LFP batteries will dominate the EV market by 2025. Lithium Iron Phosphate (LFP) batteries are projected to exceed 80% of the market share for power batteries, including those utilized in new electric vehicles (EVs), by the close of 2025 ^[1]. This significant shift positions LFP as the dominant EV battery chemistry, surpassing nickel-based cells in adoption ^[3]. Major battery producers such as CATL and BYD are instrumental in this trend, with CATL forecasted to hold an overall global EV battery market share of 39.2% and BYD accounting for 16.4% in 2025 ^[2]. These companies' extensive production capabilities underpin the widespread adoption of LFP technology.

Increased LFP adoption significantly reduces demand for specific metals. As LFP chemistry does not incorporate either nickel or cobalt, the growing market share of LFP batteries directly translates into a decreased demand for these materials within the EV battery manufacturing sector ^[3]. This trend highlights a strategic move towards cobalt-free battery technologies and an overall reduction in reliance on nickel for the primary battery types in new electric vehicles ^[4].

A significant export tariff on intermediate nickel products is highly probable before Q2 2026. Indonesia's president formally approved an export tax on nickel in March 2026, causing a notable spike in global nickel prices ^[1]. This approval signals a definitive policy shift occurring within Q1 2026. By April 2026, discussions of a "nickel levy" emerged, cited as a strategic move by Indonesia to gain greater market control and diversify trading partners ^[2]. The presidential approval and subsequent market reaction indicate that implementation is already confirmed or well underway.

These actions align with Indonesia's long-standing nickel industry downstreaming policy. The overarching goal is to incentivize domestic processing and restrict exports of less-processed forms. While the specific targets of the March 2026 export tax are not fully detailed in the provided sources, past and ongoing efforts consistently point towards applying such measures to intermediate products. Further evidence of active market intervention includes a reported 70% production cut at the world’s largest nickel mine by March 2026, specifically intended to inflate prices ^[3]. Additionally, Indonesia's MHP (mixed hydroxide precipitate) production has experienced declines as supply constraints emerged, indicating policy shifts' impact on intermediate product availability ^[4].

Given the presidential approval of an export tax in March 2026 ^[1] and the broader context of strategic levies and significant production adjustments in the same period ^[3], it is highly probable that such tariffs would apply to intermediate nickel products like MHP and nickel matte.

New North American and European plants will boost recycled battery material supply. By the end of 2025, new recycling facilities across North America and Europe are anticipated to significantly increase the availability of recycled battery components. A major contributor, Redwood Materials, aims to produce enough anode and cathode materials to power 100,000 electric vehicles annually by 2025, with a more ambitious target of 100 GWh per year by 2028 ^[1]. Redwood Materials has already initiated critical materials recovery operations in South Carolina and manages a refining plant in Nevada, striving to recover over 95% of nickel, cobalt, and lithium from end-of-life batteries ^[2]. However, specific annual tonnage outputs for lithium, nickel, and cobalt from other prominent new plants, such as Li-Cycle or Northvolt, by the 2025 deadline are not explicitly detailed in the available research ^[1].

Recycling incrementally offsets primary supply deficits, but precise 2025 data is limited. Globally, battery recycling is projected to contribute progressively to bridging primary supply shortfalls, with the potential to fulfill 10% of the total critical mineral demand for clean energy technologies by 2040 and reduce primary lithium demand by approximately 10% by 2030 in optimistic scenarios [6, p. 3, 24]. The expansion of recycling infrastructure within North America and Europe represents a strategic effort to establish domestic supply chains and reduce dependence on new mineral extraction ^[3]. Despite these regional advancements, China currently holds a dominant position in global Li-ion battery recycling capacity, accounting for a 70% share ^[4]. While the overall contribution of recycling is expected to grow, the precise quantitative offset provided by new North American and European plants by 2025, specifically in terms of material tonnages against total primary supply deficits, is not explicitly quantified in the research ^[5].

The U.S. Environmental Protection Agency finalized stringent multi-pollutant emission standards in March 2024 for light-duty and medium-duty vehicles, starting with model year 2027. These regulations aim to significantly reduce greenhouse gas and other harmful tailpipe emissions, effectively setting a trajectory that encourages a substantial increase in electric vehicle adoption for manufacturers to meet compliance targets ^[1]. This policy represents a major push towards decarbonizing the transportation sector.

Standards face significant uncertainty from legal and political challenges. The long-term survival of these EPA emission standards is highly uncertain, particularly through 2025 and into the latter half of the decade. This uncertainty stems from anticipated legal challenges and the significant possibility of a change in presidential administration in January 2025. Historical precedent shows that a prior administration repealed similar vehicle greenhouse gas standards, challenged the underlying endangerment finding, and contested state-level electric vehicle mandates ^[2]. If a new administration takes office, there is a strong possibility it would move to repeal or substantially weaken the current EPA emission standards, potentially reversing the 'lock-in' of electric vehicle adoption targets. Hypothetical analyses suggest such repeals could occur as early as February 2026 if deregulation is prioritized ^[2]. Therefore, whether these standards ultimately secure increased electric vehicle adoption for the latter half of the decade largely depends on the outcome of the 2024 election and subsequent actions by the incoming administration through 2025, alongside the results of any legal challenges.