Matthew Bird

Amidst conflicting reports of lithium inventory levels, Benchmark’s latest Monthly Lithium Inventory China shows that chemicals inventory across carbonate and hydroxide fell a further 2.8% m-o-m in August. This continues the trend seen so far in 2026 where inventory levels have fallen 10.0% year-to-date and the typical H1 build and H2 draw down pattern has been absent. “It leaves the market without the buffer between supply and demand that dampens price movements as participants near the final quarter of the year, where consumption is typically strongest,” said Adam Megginson, Benchmark’s principal lithium price analyst.

Rising chip prices are forcing portables manufacturers to look at increasing retail prices, reducing specifications or absorbing some of the cost and accept lower margins. This is acting to increase the gap between the prices of premium and budget products. Premium brands such as Apple or Samsung are better positioned to pass through cost increases due to stronger brand power and higher average selling prices, whilst more budget brands are more exposed to demand reduction if they increase prices. “While some stabilisation may occur, chip costs are expected to remain elevated in the near term, favouring companies with strong pricing power, efficient supply chains, and differentiated ecosystems,” said Benchmark battery analyst Anya Sidhu.

The US Department of Energy (DoE) announced $500 million in grants for battery materials, manufacturing and recycling towards the end of August 2026. The grants went to a range of battery minerals and materials including next-generation anodes, direct lithium extraction (DLE), cobalt, electrolyte, and recycling. These are the third round of grants from the DoE’s “Battery Manufacturing and Recycling” and “Battery Materials Processing” programmes, which each have $3 billion in funding available. Previous rounds were announced in 2022 and 2024 under the Biden Administration. These grants follow a recent announcement of $2 billion in investment for critical supply chain projects.

Tesla sold just over 6,500 EVs in Europe in July 2026, its lowest monthly level in the region since October 2022. Its sales in the region fell 53% year-on-year, with Germany and the UK, the region’s two largest automotive markets, registering just 367 and 512 Teslas, respectively.  Tesla’s heavy sales decline in July contradicts the strong performance it had in the region across the opening six months of the year, with sales rising 39% compared to the opening six months of 2025. However, following a weak July, its year-to-date growth in the region has dropped to 30%.   "While Tesla’s deliveries in Europe were unusually low in July, it followed a very strong end to Q2 where Tesla will have concentrated its efforts on maximising deliveries before the end of the quarter. Tesla had a strong opening six months of the year in Europe and there as signals that this is expected to persist despite the drop in July," said George Whitcombe, Benchmark's senior EV analyst.

CATL's Jianxiawo lepidolite mine, China's largest lithium mine by capacity, is back in care and maintenance after a brief and informal restart in July. Any return to production is now gated by an environmental review since the mine’s Environmental Impact Assessment (EIA) was revoked. Completing the review could stretch into the fourth quarter or into 2027. Benchmark has cut its 2026 mined output forecast for Jianxiawo to 32,000 tonnes LCE, from 62,500, almost halving the mine's expected contribution, while its 2027 forecast is so far unchanged at around 99,000 tonnes.

CATL became the largest shareholder in Qiyuan Green Power, China’s largest heavy-duty truck battery swapping network operator. CATL bought the entirety of the 24.87% stake held by China Power, a subsidiary of the State Power Investment Corporation for RMB2.6 billion (USD380 million). This raised CATL’s total stake to around 30%. The move helps CATL to secure Qiyuan’s battery swapping infrastructure. Qiyuan currently leads the market with over 1,800 stations nationwide, giving it a market share of over 70% across various heavy-truck settings, including mining zones. Combined with CATL’s own QIJI Energy battery swapping network, this move makes the company China’s largest heavy-duty battery swapping operator.

Benchmark has observed no cobalt hydroxide trades over the past 10 days, leading to the daily price assessments to hold steady at $22.00–$23.00/lb. However, Benchmark has noted a widening spread between bids and offers, which are reported between $17.00–$22.00/lb in Benchmark’s weekly cobalt price assessment. Benchmark's daily CIF Asia cobalt hydroxide assessment only accounts for confirmed  transactions rather than indications, sentiment, or levels at which somebody says they would be willing to deal, which means it tracks evidenced trades and nothing else. That design choice is usually invisible to the user, because in a functioning market the distance between a trade and a well-informed indication is small, but in a week like this one it becomes the whole picture. Put those two series side-by-side and the market becomes legible, because the sell-side remains anchored to the level where material last actually changed hands while the buy-side has marked itself down five dollars, or roughly 23% below it. Nothing has traded across that gap, so the bid has not been validated by a single transaction and the offer has not been tested by a single buyer willing to lift it.

Africa is a key mining destination for a range of critical minerals across the energy transition supply chain. However, the majority of these minerals are exported for processing outside of the region. Most notably, Africa is the largest source of mined cobalt, where the Democratic Republic of Congo (DRC), the subject of a previous Regional Spotlight, is the world’s leading supplier. The continent also leads global supply of mined manganese ore; it was responsible for three quarters of this in 2025.

Hakainde Hichilema was declared president-elect of Zambia on 18 August. Hichilema was re-elected after securing nearly 3 million votes, more than 1.1 million votes ahead of his opponent, Brian Mundubile of the NRPUP, and comfortably above the 50% threshold required to avoid a run-off. "The result is expected to deliver policy and geopolitical continuity, including the continuation of the beneficiation agenda set out in Zambia's 2024 critical minerals strategy," said Benchmark's lead policy and geopolitical analyst Bryan Bille. Copper is a crucial export for Zambia, accounting for around three-quarters of the total value of the country’s exports. Mined production in 2026 is estimated at 901kt, a healthy growth of 11% over last year, as assessed by Benchmark’s Copper Service. The Zambian government is aiming to increase output to 3Mtpa by 2031.

The greater deployment of drones is having a profound impact on the modern battlefield and has put the geopolitics of the battery supply chain into a new spotlight. In 2025, drones accounted for 39.2% of defence demand for batteries, according to Benchmark. This is up from just 20% in 2020. Soldier power and bases are the two next largest drivers of defence demand for batteries. "Drones have clearly risen to be the most influential aspect of modern military battery demand,” said Will Roberts, Benchmark’s automotive research lead.  “Major militaries are still just getting started in their strategic investments relating to them which is about to set off a flurry of activity to domesticate supply chains, something which is getting significant attention from major battery manufacturers and new entrants alike."

Much of the attention on South & Central America’s transition to electric vehicles (EVs) focuses on Mexico and Brazil owing to their large total vehicle markets and automakers establishing EV production capacity in both.  However, it is Uruguay that has quietly risen to lead EV adoption in the region. It achieved a penetration rate of 40% over the first seven months of the year, surpassing numerous European countries, including France, Germany and the UK.  "Uruguay is a testament to how tax policy can be a really effective tool to create quick change regarding EV adoption in a relatively short period of time under the right market and economic conditions,” said Benchmark EV analyst George Whitcombe. 

Global battery energy stationary storage (BESS) industry witnessed explosive growth in H1 2026, with both cell and system-level shipments nearly doubling compared to H1 2025. This has been driven by both booming global grid-scale and growing residential storage demand.  "Beyond the robust headline growth, the market is undergoing profound structural differentiation," said Benchmark BESS analyst Calvin Xu. "This includes diverging concentration trends between cell manufacturing and system integration, reshuffled enterprise rankings, and intensified mid-tier competition, marking a critical shift from scale expansion to stratified competition across the industrial chain."