"Our research highlights that the lithium market is expected to experience a lower price environment, while cobalt prices are expected to be supported by sustained market deficits," S&P said.

Global passenger plug-in vehicle sales were forecast to fall 7.63% year-on-year to 1.95 million units in 2020, according to the briefing, against the backdrop of weaker total vehicle sales due to COVID-19.

However despite uptake slowing in China this year, S&P Global analyst Alice Yu said sales in Europe would increase due to stricter emissions standards which would mitigate the global decline.

The briefing tipped post-2020 plug-in sales growth to be driven by policy and lower battery costs, with policy efforts in Europe and China remaining favourable to fleet electrification.

Automakers faced a critical shortage of battery materials once normality returned, Benchmark Mineral Intelligence's Caspar Rawles told an online EV supply chain festival in May. 

S&P Global Market Intelligence said last week the monthly lithium price was down 9.5% so far this year to $8375/t at April 30 and it expected the decline to continue into the third quarter due to partial demand recovery and high inventories.

The briefing forecast the lithium price to go as low as $7844/t in 2021, with prices recovering from 2023 onwards and lithium demand expected to increase by 96% between 2019-2024.

Yu said the cobalt price was expected to decline by 4.6% year-on-year to $14.37 per pound in 2020 before rising to average $24.39/lb in 2024.

The market balance was expected to turn to deficit in 2022 as plug-in sales grew strongly while Glencore's Mutanda mine in the Democratic Republic of Congo remained shut.

"This will support cobalt prices rising and sustaining above $20/lb from 2022 onward, inducing Glencore to resume production at Mutanda in 2023," the briefing noted.

Mutanda's shutdown in November 2019 had removed about 20% of global cobalt mine supply.

The cobalt market would likely experience greater demand uncertainties from vehicle electrification compared with lithium, because the chemistry choice which affected cobalt consumption intensity more significantly than lithium consumption remained unpredictable, according to the briefing.