Electric vehicle demand – has the world got enough lithium?

As the auto industry shifts away from fossil fuels and toward battery power, lithium is in the spotlight. Demand for the metal has skyrocketed recently, as has its price.

The bad news for the world is that it potentially has nowhere near enough of it to power all the electric vehicle (EV) batteries it wants – and needs.

Global EV purchases jumped to 6.6 million in 2021 from 3 million a year earlier, meaning that EVs made up 9% of the market, according to the International Energy Agency (IEA). They accounted for all the growth in worldwide car sales, which rose to 66.7 million last year, up from 63.8 million in 2020. This implies that non-EV sales fell by 700,000.

How much lithium does an EV need?

A lithium-ion battery pack for a single electric car contains about 8 kilograms (kg) of lithium, according to figures from US Department of Energy science and engineering research center Argonne National Laboratory.

Global lithium production totaled 100,000 tons (90.7 million kg) last year, while worldwide reserves stand at about 22 million tons (20 billion kg), according to the US Geological Survey. 

Dividing lithium production by the amount required per battery shows that enough lithium was mined last year to make just under 11.4 million EV batteries.

What are car companies doing about it?

Uncertainty around the supply of lithium has pushed automakers to go straight to the source and secure their own supplies. Ford announced agreements with lithium companies that will allow it to build 600,000 electric vehicles per year starting in 2023. General Motors has made similar deals. 

Both have made a point of inking deals with US-based suppliers. After being burned by the ongoing computer-chip shortage, automakers want to avoid becoming over reliant on imports. Most of the current lithium supply is mined in South America or Australia and processed in China. Tesla has said it’s looking into processing lithium itself.

Securing enough battery-grade lithium is one of the most difficult challenges automakers face in the near term. Sources of the metal are still fairly limited because there wasn’t much demand for it until EVs started taking off. But the industry is working to grow supply.