Lithium has become a fundamental material for the transformation towards clean energy, whether it is used in batteries for electric vehicles or to store renewable energy from the wind or the sun. The lithium needed for these applications not evenly distributed all over the world. That is why it is a submissive good to price fluctuations. Its increase is causing a strong impact on the electric vehicle market. A recent report by consultancy Gran View Research forecasts that this market will double by 2030 driven by the growing demand for electric vehicles.
What seemed impossible a few years ago is finally happening. The mass adoption of electric cars It will become a reality in a few years. Beyond Tesla, traditional automakers are reporting staggering growth in EV sales numbers. So much so that some even have difficulty meeting demand.
According to Jim Farley, CEO of Ford, its electric cars sell as fast as they are made. So much so that the brand plans to produce 600,000 units by the end of next year and up to two million in 2026. And it is not the only case. Mercedes Benz will be an all-electric brand in 2030, General Motors claims to be reaching a turning point with the goal of reaching two million electric vehicles by 2025. hyundai says electric cars already account for 7% of its global sales, while planning to convert to Genesis in an electric brand in 2025. Volkswagen, Renault, Stellantis and Toyota have announced grand plans backed by multimillion-dollar investments to unseat Tesla and become the leaders in electric car sales.
Great View Research: Lithium becomes the problem
The consequence of all this is a huge increase in the production of electric vehicles that is creating an overwhelming demand for lithium, a fundamental mineral since, for now, it is essential to manufacture the batteries for all these electric vehicles. Lithium-ion batteries are currently the standard technology due to their characteristics of energy density, durability and safety levels.
But supply is limited. According to a new report by consultancy Gran View Research, the lithium market is currently worth around 7.5 billion dollars, almost 10% more than last year. Experts believe that the demand it will only speed up from here as automakers ramp up production of electric vehicles. “The rapid development of battery technologies is driving the demand for LiOH, which is driving the growth of the market,” the report states.
The forecasts of investment of all electric vehicle manufacturers, numbered in billions, are dedicated to different purposes. The development of electric vehiclesstart-up of their own battery factories and execution of R&D programs seeking to improve technology. This has caused the price of lithium to increase by 400% compared to 2021currently reaching record figures that for now tend to remain.
Grand View Research forecasts lithium market revenue to reach $18.99 billion, representing an increase of 153% compared to this year ($7.49 billion). In parallel, an increase in lithium production is expected both in the United States and in the rest of the world
According to Benchmark Mineral Intelligence analysis, the lithium industry needs an investment of $42 billion (40,400 million euros) to meet the demand for this raw material for electric car batteries between now and 2030.
Despite limited supply and fluctuating lithium prices that are now at their highest levels, the electric vehicle market is expected to maintain steady growth over the next few years. The study published in the journal Joule stated that the price of lithium is likely to fall back to its previous levels around 2025.
