Excerpt from visualcapitalist.com
Lithium is one of the most in-demand commodities in the world today.
With the ongoing shift to electric vehicles (EVs) and clean energy technologies, governments and EV manufacturers are rushing to secure their supply chains as demand for lithium soars.
But while China has a strong foothold in the lithium race, the U.S. is lagging behind. This infographic from our sponsor Scotch Creek Ventures highlights the rising demand for lithium and the need for a domestic supply chain in the United States.
What’s Driving the Demand for Lithium?
Global lithium production more than doubled in the last four years to 82,000 metric tons in 2020, up from 38,000 metric tons in 2016. Here are some of the factors driving the lithium rush:
- More EVs on the Road:
EV sales have been accelerating in recent years. Between 2016 and 2020, annual electric car sales increased by 297%, up from around 750,000 to nearly 2.9 million cars last year. - Falling Battery Prices:
Declining lithium-ion battery prices are allowing EVs to compete more aggressively with gas-powered cars. Since 2013, battery costs have fallen 80% with a volume-weighted average of $137/kWh in 2020. - Rise of the Battery Megafactories:
More battery manufacturing capacity means more demand for the critical minerals that go into batteries. As of March 2021, there were 200 battery megafactories in the pipeline to 2030, and 122 of those were already operational. According to Benchmark Mineral Intelligence, if all 200 battery megafactories were operating at full capacity, their annual demand for lithium would be 3 million tonnes. That’s almost 37 times the 82,000 tonnes produced in 2020.
Although the demand for lithium is rising globally, its supply chain from mines to batteries relies on a only few critical nations.