LITHIUM COMPOUND MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Lithium Compound Market Size and Trends

The lithium compounds market is estimated to be valued at USD 7.73 Bn in 2024 and is expected to reach USD 18.64 Bn by 2031, growing at a compound annual growth rate (CAGR) of 13.4% from 2024 to 2031.

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The demand for lithium compounds is projected to grow significantly during the forecast period owing to the increasing sales of electric vehicles worldwide. Key factors, such as stringent emission norms, rising environmental concerns, and supportive government policies and incentives, are favoring the adoption of electric mobility over conventional vehicles. As lithium compounds play a key role in lithium-ion batteries that power electric vehicles, their demand is expected to rise in tandem with EV sales over the next few years.

Rising electrification in the automotive industry

The automotive sector has been a major driving force contributing to the growth of the global lithium compounds market. For instance, according to data published by the Automobile Sector resulted in 5.41% of the total FDI inflow as per the September 2023 DPIIT Report. The lithium compounds market is expected to witness significant growth in the coming years due to the rising demand for lithium-ion batteries from the automotive industry. There is a global push for more environment-friendly vehicles and a growing concern about emissions from internal combustion engine vehicles. Many countries have announced plans to ban the sales of new gasoline and diesel cars and are encouraging producers to shift towards electric vehicles. Major automakers are heavily investing in electric vehicle development and production to cater to this growing demand.

Expansion of Energy Storage Requirements

Another key factor leading to the increased demand for lithium compounds is the rapidly expanding global energy storage market driven by the rising integration of renewable energy sources like solar and wind. For instance, according to data published by IEA in 2022, the installed grid-scale battery storage capacity is expected to expand 35-fold between 2022 and 2030 to nearly 970 GW. Additionally, intermittent supplies from renewables require efficient energy storage technologies to balance power grids and ensure reliability of electricity supply. Lithium-ion batteries have emerged as the preferred choice for utility-scale energy storage projects due to their suitability for high discharge power applications and long operational life. Many countries and regions have set ambitious targets to increase the share of renewables in total power generation which will necessitate the deployment of large amounts of energy storage capacity.