August global BEV sales were broadly flat year to date, while lithium is still forecast to remain in deficit through 2029

Overview

This lithium market update uses August BEV sales and penetration data across China, the US and EU-10 to assess demand conditions. J.P. Morgan sees uneven regional EV momentum but continues to expect a lithium market deficit through 2029, albeit a narrower one than previously forecast.

Core views

Global BEV sales across China, the EU and the US rose 2% month on month to 967k units in August and were up only 1% year on year. Year-to-date global sales were flat. BEV penetration nevertheless rose to 27% from 25% in July 2026, indicating that electric vehicles gained share even as aggregate vehicle demand remained subdued. China was the main source of August strength. BEV sales rebounded 8% month on month to 698k units, lifting BEV penetration to 45%. Total EV penetration, including plug-in hybrids, increased to 65% from 64%. The report notes that its China series now uses retail sales rather than the wholesale-sales basis used previously, an important convention when comparing the data. The US remained the weakest major market in the update. August BEV sales increased 3% month on month to 80k units from 77k, but sales were down 31% year to date and BEV penetration was unchanged at 6%. In contrast, EU-10 BEV sales declined 14% month on month to 189k units, but were up 40% year to date. EU-10 penetration increased to 29% from 25% in July, showing continued share gains despite the monthly volume decline. J.P. Morgan links these EV-demand indicators to its recent lithium supply-demand review. It continues to forecast a lithium deficit through 2029, but says the projected shortfall is narrower than in its prior forecast. Reflecting this revision, it reduces its spodumene price forecast by about 13% to US$2,400/t for 2027 and by 16% to US$2,000/t for 2028. Within lithium equities, the report identifies PLS as its top pick.

Analysis framework

The report tracks monthly BEV sales, year-on-year and month-on-month changes, and penetration rates across China, the US and EU-10. It then uses those regional demand indicators alongside J.P. Morgan's lithium supply-demand review to update the expected market balance and spodumene price outlook.

Methodology notes

• Industry AnalysisSupply-demand framework

  Lithium supply-demand review

  J.P. Morgan combines EV demand indicators with its assessment of lithium supply and demand to forecast a market deficit through 2029 and revise spodumene price assumptions.

• Industry AnalysisPenetration-Rate S-Curve

  BEV and total EV penetration rates

  The report measures the share of vehicle sales represented by BEVs and EVs to show adoption progress across regions, rather than relying on sales volumes alone.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• PLS Group (PLS.AX)

  J.P. Morgan's top pick in the lithium space.

  Strengths

  Identified as the report's preferred lithium equity.

Key data

• Global BEV sales, August967k unitsUp 2% MoM and 1% YoY; flat YTD.
• Global BEV penetration, August27%Up from 25% in July 2026.
• China BEV sales, August698k unitsUp 8% MoM.
• China BEV / total EV penetration, August45% / 65%BEV penetration increased; total EV penetration rose from 64%.
• US BEV sales, August80k unitsUp 3% MoM from 77k, but down 31% YTD; penetration remained 6%.
• EU-10 BEV sales, August189k unitsDown 14% MoM but up 40% YTD; penetration rose to 29% from 25%.
• 2027 spodumene forecastUS$2,400/tCut by about 13% versus the prior forecast.
• 2028 spodumene forecastUS$2,000/tCut by 16% versus the prior forecast.

Impact & implications

The report presents China’s higher BEV sales and penetration as support for lithium demand, while weak US year-to-date sales and mixed EU monthly volume trends show that regional momentum remains uneven. J.P. Morgan still expects a lithium deficit through 2029, but its narrower-balance outlook supports lower projected spodumene prices for 2027 and 2028.