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BATT's China-heavy lithium fund meets a slowing EV market

BMI expects lithium prices to drift lower in the second half. BATT's China sleeve, at more than 30%, makes that a local problem.

At a glance

  1. Demand runs in two directions.
  2. The Amplify Lithium & Battery Technology ETF tracks the EQM Lithium & Battery Technology Index, and as of June 30 it carried a China allocation above 30%.
  3. ETF Trends pitches BATT as a hedge against lithium's own volatility.

BMI, Fitch Solutions' research arm, now sees China lithium carbonate at $20,100 a ton. It puts lithium hydroxide at $19,600 a ton. Those levels lock in the momentum from the first half of 2026. ETF Trends reports BMI expects prices to drift lower in the second half, with battery-energy-storage demand doing the work of keeping a floor under the market.

Demand runs in two directions. In China, NEV sales were up 23.6% year over year in June, reaching 1.6 million units. Penetration hit a record 58.5% of new-car sales, a third straight month at that mark. Globally, the picture cools. BMI forecasts lithium demand growth of 5.8% in 2026. That compares with 18.5% in 2025. Passenger EV sales growth eases to 3.9%. Supply is not helping; production is expected to rise 13.2%, with Australia and China leading. Slower consumption and faster output make up the oversupply worry the price forecasts are weighing.

Lithium demand growth slows while supply keeps climbing

18.5%Demand growth 20255.8%Demand growth 2026F13.2%Production growth 2026F18.5%Demand growth 20255.8%Demand growth 2026F13.2%Production growth 2026F18.5%Demand growth 20255.8%13.2%Production growth 2026F
Source: BMI forecasts via ETF Trends · 2026
Show as table
LabelValue (%)
Demand growth 202518.5%
Demand growth 2026F5.8%
Production growth 2026F13.2%

Storage holds the floor

That tension is where BATT sits. The Amplify Lithium & Battery Technology ETF tracks the EQM Lithium & Battery Technology Index, and as of June 30 it carried a China allocation above 30%. The index splits the value chain into battery metals and materials, storage solutions, and EV production, putting CATL next to the lithium miners. Among those segments, storage has the clearest near-term case: lithium iron phosphate batteries account for more than 90% of battery-energy-storage applications. Grid-scale storage is the demand source BMI expects to prevent a deeper slide.

ETF Trends pitches BATT as a hedge against lithium's own volatility. A single-commodity position rides the swing; BATT spreads the bet across mining, storage, and automakers. That is access to China's electrification machine without a bet on any one price. The forecast has a limit, though. The same numbers that put a floor near $20,000 also put a ceiling on the rally.

The same numbers that put a floor near $20,000 also put a ceiling on the rally.

Reported by the Passive & Indexing desk from ETF Trends. Published . Corrections

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