The lithium market is estimated to witness high growth owing to increasing demand for evs and growing electronics industry
The lithium market is estimated to be valued at US$ 52.74 billion in 2024, exhibiting a CAGR of 17.5% over the forecast period (2024-2031). Furthermore, the rapid adoption of electric vehicles is propelling the demand for lithium as it is extensively used in lithium-ion batteries that power EVs.
Increasing demand for electric vehicles and growing electronics industry are the major drivers propelling the growth of the lithium market. Lithium is an essential metal used in the manufacturing of lithium-ion batteries that power electric vehicles. With growing environmental concerns, sales of EVs are increasing substantially which is augmenting the demand for lithium globally. According to the International Energy Agency, the global stock of electric cars passed 7 million in July 2021, up from 5 million in 2020. This rapid rise in EV adoption is directly influencing the lithium market growth. Additionally, lithium is also a key component used in various electronic devices such as smartphones, laptops, power tools, etc. Globally, the growing demand for consumer electronics driven by increasing population, urbanization, and digitalization is another factor fueling the consumption of lithium.
Rising Demand from the Electric Vehicles Industry
The lithium market is growing rapidly due to the rising demand from the electric vehicles industry. As more automakers are launching electric vehicle models to cater to the increasing consumer demand for sustainable mobility solutions, the need for lithium-ion batteries is growing exponentially. Lithium is a key component used in the manufacturing of lithium-ion batteries that power electric vehicles. Analysts project electric vehicle sales to increase significantly in the coming years, which will, in turn, will boost the demand for lithium from battery manufacturers. This rising EV adoption is a major growth driver for the lithium market in the long run.
Increased Use of Lithium in Consumer Electronics
Lithium is widely used in various consumer electronic products such as smartphones, laptops, power tools, and others. Constant innovation and upgrading in the consumer electronics industry has increased the lithium consumption over the past decade. Lithium-ion batteries provide more power and longer run-time than traditional batteries. With consumers upgrading their devices more frequently, the need for high-capacity lithium batteries is expected to continue rising. Moreover, the growth in sales of IoT devices and wearables will further augment the demand. Therefore, increased usage of lithium in a wide range of consumer gadgets is a key driver propelling the lithium market.
Geopolitical Issues Related to Lithium Supply
The lithium supply chain is concentrated in a few countries like Chile, Argentina, Australia, and China, which account for the majority of global lithium production. Geopolitical issues and uncertainties in these nations affect the stable supply and prices of lithium in the international market. Any socio-political instability or shifts in trade policies regarding the exports of lithium compounds can negatively impact the market. Moreover, environmental regulations surrounding lithium mining also introduce supply-related challenges. These geopolitical constraints play a restraining role in the lithium market.
High Investment and Long Timelines for Production
Setting up lithium production facilities requires massive capital investments and has longer timelines for commissioning. It can take 5-10 years for a new lithium mining project to start commercial operations. Further, lithium brine resources which account for a large portion of reserves also have high capital costs. The involvement of huge upfront investments acts as a barrier, limiting new players from entering the market. This capital-intensive nature of the lithium business restrains faster capacity additions and market growth.
Rising Investments in Energy Storage Systems
The energy storage sector utilizing lithium-ion batteries is attracting significant investments globally to support the adoption of renewable energy sources. Both utility-scale and behind-the-meter residential storage solutions are growing rapidly to provide backup power, enable energy shifting, and increase grid reliability. As more countries focus on energy transition, opportunities will emerge for lithium supply to the burgeoning storage market. This presents a major market potential for lithium producers in the coming years.
Emergence of New Applications for Lithium
R&D in lithium chemistry is opening up new applications for this metal beyond existing uses. One such opportunity lies in utilizing lithium’s heat dissipation abilities in industries like aerospace and defense. Lithium is also being evaluated for novel battery technologies beyond lithium-ion, including lithium-sulfur, to provide higher energy density. Its widespread use in greases, glasses, and medical products also offers an expanding market. Continuous product innovations will uncover new application areas, driving long term lithium consumption globally.
Link: https://www.coherentmarketinsights.com/market-insight/lithium-market-5053
Key Developments
- On July 13, 2024, IBAT, a leading technology company, announced the launch of its innovative lithium extraction technology in Utah. This groundbreaking development is set to revolutionize the way lithium, a critical mineral for the growing electric vehicle and energy storage industries, is extracted and processed.
- In January 2024, the government of Bolivia announced the launch of a new international tender for lithium extraction projects within the country. This move is part of Bolivia's ongoing efforts to capitalize on its vast lithium reserves and position itself as a key player in the global lithium supply chain.
- In March 2024, Stryten Energy, a leading provider of energy storage solutions, announced the launch of its new line of lithium batteries at the MODEX 2024 trade show. This strategic move by Stryten Energy aims to capitalize on the growing demand for lithium-based energy storage systems in various industries, particularly in the material handling and logistics sectors.
- In 2023, Exxon Mobil Corporation, one of the world's largest oil and gas companies, announced plans to become a leading producer of lithium, a critical component in electric vehicle (EV) batteries. This strategic move by ExxonMobil represents a significant shift in the company's focus, as it aims to capitalize on the growing demand for lithium and the transition towards electric mobility.
Key Players
Albemarle Corp., Ganfeng Lithium Co., Ltd., SQM S.A., Tianqi Lithium Corporation, Livent Corp., Lithium Americas Corp., Pilbara Minerals, Orocobre Limited Pty. Ltd., Mineral Resources Group Co., Ltd., Avalon Advanced Materials Inc., Sichuan Yahua Industrial Group Co. Ltd, Morella Corporation Limited, Mineral Resources, Ganfeng Lithium Co. Ltd, and Allkem Limited
