EV Batteries

A by-the-numbers look at lithium, a key commodity for automakers

As it stands, the EV revolution will require a lot more of the metal.
article cover

Francis Scialabba

5 min read

After decades of subdued interest in lithium, rapidly rising demand and prices have made “white gold” one of the hottest sectors in the mining world.

Batteries are a foundational technology in the transition away from fossil fuels. And in order for automakers to electrify their fleets and renewable energy developers to meet their aggressive goals, the world will have to make a lot more of them. At least for now, lithium is in almost every EV battery, and that means demand for the metal likely isn’t going to slow any time soon.

So just how big is the appetite for lithium, and how much of this mineral is available to make the journey from extraction to a battery cell? Here’s a by-the-numbers look at the size of lithium demand as EV adoption accelerates and what it will take to scale the battery industry.

EV sales are increasing rapidly, driving the demand for lithium-ion batteries. Last year marked a potential inflection point for the industry: EVs surpassed 5% of all auto sales in the US, and global EV sales are on track to more than triple by 2025, according to BloombergNEF.

By 2030, spurred by the Inflation Reduction Act and 2035 bans on sales of gas-powered cars in California, New York, and the EU, EVs could make up more than 40% of all passenger-vehicle sales globally and more than half of those sales in the US, according to BNEF.

Battery companies and automakers are sprinting to scale up battery production. The latest projections from BNEF estimate that US demand for batteries in 2030 will be ~10x greater than demand today, totaling nearly 3,000 GWh cumulatively by the end of the decade.

More than $129 billion had been invested in gigafactory projects as of the end of 2022, by a mix of battery manufacturers, automakers, governments, and private investors, according to Benchmark.

This pipeline of facilities means the global capacity for battery production could increase from ~1,100 GWh in 2021 to more than 8,000 GWh in 2031, according to data from Benchmark.

According to Caspar Rawles, chief data officer at Benchmark Mineral Intelligence, “the challenge that the lithium industry is facing is that it’s not like you’ve got a short period where demand is expected to increase. It’s increasing at a very significant level year after year after year.”

There are projects in development now that are expected to begin producing lithium in the mid-2020s, but there’s still a lack of clarity about how the industry will address the long-term supply gap, he said.

Keep up with the innovative tech transforming business

Tech Brew keeps business leaders up-to-date on the latest innovations, automation advances, policy shifts, and more, so they can make informed decisions about tech.

“You need to effectively be bringing on more than one world-class lithium deposit every year for the foreseeable future,” Rawles said. “And being able to achieve that is extremely hard.”

Lithium is one of the most abundant resources on earth, but deposits that are economically viable to mine are concentrated in a few regions.

“It’s not necessarily finding the lithium. It’s the minerals that are associated with it, because some can be extremely challenging to liberate from the lithium. So it’s about the quality of the deposit,” Rawles said. “And then, importantly, getting it to battery grade in the right time frame, at the right cost.”

For example, Bolivia has the largest lithium resources in the world, with ~21 million tonnes in the ground, but none of that is, “as of right now, considered [to be economically extractable],” Brian Jaskula, mineral commodity specialist at the US Geological Survey, told us.

Because of the high price of lithium now, a record number of entities are currently working on different stages of establishing lithium mines—from exploration to more advanced development, he said.

With lithium prices soaring, “a record number of entities” are currently working on different stages of establishing lithium mines—from exploration to more advanced development, he said.

“In the last 10 years or so, the amount of [lithium] reserves and resources have increased tremendously, because people have been going out and exploring for it,” Jaskula said.

Looking ahead…

Meeting all of this demand will require more mines.

“To meet the world’s lithium requirements, it would require 74 new lithium mines with an average size of 45,000 tons by 2035,” Rawles said.

That number is part of the more than 300 new mining operations for materials including lithium, nickel, cobalt, and graphite that would be needed by 2035 to meet projected battery demand, according to Benchmark.

If recycling volumes match current projections, it would take 59 new lithium mines, Rawles said.

“So if you account for [recycling], it’s still a lot,” he said. “It’s four or five a year, basically, at that size.”

Expansions of existing operations are able to come to market the quickest, typically taking about three to five years, but new projects face longer timelines, Rawles said.

And even experienced mining companies often miss their own targets for bringing operations online, Rawles said.

“I don’t think we’ve ever seen anything ahead of schedule. It’s always delayed,” he said.

Keep up with the innovative tech transforming business

Tech Brew keeps business leaders up-to-date on the latest innovations, automation advances, policy shifts, and more, so they can make informed decisions about tech.

T
B