Pilbara Minerals hopeful of lithium market turnaround, secures new financing. That decision had a substantially negative impact on EV sales.Following the government announcement, EV sales in China suffered a 6-month long slump, ending 2019 lower by 4% YoY.In a one-two punch, the coronavirus pandemic badly hit Chinese EV vehicle sales, which fell 27% as of last month, after being down as much as 77% in February.With a looming global recession, consumers are less likely to make large purchases such as cars and may be reluctant to try new technology (EV) compared to the traditional one (gasoline).Since EVs are the largest use-case of lithium, this slump in demand for EV’s can pressure its prices and hurt Pilbara’s profitability.In the context of the coronavirus pandemic, Australia appears to hold China accountable and has requested an independent inquiry into the matter.This request was not received well by Beijing and might have damaged the economic relations between the two countries.Shortly after the inquiry request, China announced tariffs on barley imports from Australia and suspended multiple Australian meat import licenses.Although China stated that its decision was mainly a trade response, some Australian politicians believe it is economic coercion aimed at strengthening China’s diplomatic position.Given Pilbara’s massive exposure to the Chinese market, a deteriorating relationship between Australia and China might present a problem in the coming years.Further, as seen below, the prices of lithium carbonate and lithium hydroxide have been Such failures leave China in greater control of the lithium supply.There could also be more consolidation amongst Australian hard rock miners, but it is expected that PLS will ride out the trend and emerge stronger once prices bottom out, expectedly in 2020.We will compare Pilbara to Altura Mining (ASX AJM) and Galaxy Resources (ASX GXY).Both these companies are Australia based pure-play lithium producers.We will use the price-to-book ratio to compare valuations, total debt-to-equity to compare leverage, and total asset turnover to compare the efficiency of the company to its peers.In terms of valuation, Pilbara is priced in between Altura and Galaxy has a P/B of 1.4 compared to 1.64 and 0.98 respectively.Pilbara has a total debt-to-equity ratio of 41.47%, making it much less leveraged than Altura, but much more geared than Galaxy Resources.When it comes to efficiency, Pilbara (0.11) looks very inefficient compared to Altura (0.29) and slightly inefficient compared to Galaxy (0.14).It may be noted that PLS is currently in a moderated production phase due to a soft market.However, the company took the opportunity to make plant rectification and improvements resulting in exceptional plant performance and lithium recovery.Recoveries (at 72% – 78%) are now in line with plant design specifications.The stock price of Pilbara Minerals Limited (ASX: PLS), at A$0.26 is down nearly 80% from its peak of A$1.25 achieved in December 2017.There is every expectation that lithium carbonate/hydroxide prices will finally bottom out in 2020 as marginal producers are squeezed out, and others cut back production.Further, the long-term fundamentals of the EV/battery industry, and likely supply deficits of lithium, could prove positive for PLS.The stock is currently facing resistance around the A$0.40 level, which will likely break once the lithium price starts to recover.For a higher risk but higher potential upside return, PLS is holding up well at this level.