While alternative chemistries for advanced batteries are actively being researched, lithium ion batteries are likely to dominate use in electric vehicles for the foreseeable future. Lithium only constitutes about 2% of the total mass of a battery, yet global trends in lithium supply and demand are critically important to understanding the potential for mass adoption of EVs.
Interestingly, Chile holds the largest reserve of lithium but lags Australia in mine production. This may change into the future as demand increases, and increased exploration will likely broaden the map of known lithium reserves. In particular, Bolivia is believed to have expansive lithium reserves but has not to date pursued significant excavation of that resource.
There are several sources that project future supply and demand of lithium, as well as production capacity. Although sources differ on the relative scales for supply and demand, the general consensus is that demand for lithium will rapidly increase between now and 2030 and that EV batteries will dominate the global lithium market — increasing from 30-40% of global demand today to 70-90% by 2025.
Most sources believe that global lithium reserves are sufficient to meet demand through 2030 and beyond. However, there are conflicting opinions between sources regarding the mining industry’s preparedness to expand lithium extraction. For example, analyses by McKinsey suggest current and planned lithium extraction capacity is sufficient to meet demand, but similar analyses by Bloomberg New Energy Finance suggest additional mining plans are insufficient to meet demand. Projections from Morgan Stanley also indicate a significantly larger lithium demand the McKinsey projections.
Discrepancies in future demand projections are rooted in uncertainties related to three key factors: EV adoption rates, advances in battery technologies, and advances in recycling. Each of these factors are explored in depth elsewhere on this website, but the underlying theme is that they are each extremely difficult to predict with meaningful accuracy. That said, it is generally accepted that lithium will remain an integral material within EV batteries for the foreseeable future and demand for lithium should scale roughly proportional to demand for EVs. Recycling of lithium from batteries is technically feasible today but is generally not a financially-viable activity. This may change as technology advances and increased demand affects the overall economics of lithium extraction.
Relevant Information Sources:
Bloomberg New Energy Finance
McKinsey & Company
United States Geological Survey
Kushnir, Duncan, and Björn A. Sandén. 2012. “The Time Dimension and Lithium Resource Constraints for Electric Vehicles.” Resources Policy 37 (1): 93–103. doi:10.1016/j.resourpol.2011.11.003
Morgan Stanley Research. “EV Infrastructure: Tesla's Footprint Maps a $2.7Tr Industry Problem.” October 2017.