In its recent report, Wood Mackenzie estimated that global lithium demand may exceed 13 million tonnes by 2050 thanks to an accelerated energy transition, while supply deficits could manifest as early as 2028.
The consultancy has drawn several scenarios for the lithium market prospects. It expects that under the baseline scenario, existing supply projects are unlikely to meet demand beyond the mid-2030s, while a net-zero scenario will see deficits to begin in 2028 and persist through mid-century.
"The lithium market is heading into a supply crunch much sooner than many industry players expect," said Wood Mackenzie research director Allan Pedersen.
"Under ambitious climate scenarios, we see deficits emerging from 2028. The industry needs to act now should governments progress policies towards net zero. Projects approved today will determine market balance in the critical 2030s."
Wood Mackenzie believes that electric vehicles (EVs) will remain the primary driver of demand growth, accounting for 72% to 80% of lithium consumption. A broader segment of rechargeable batteries across all applications will account for 96% to 98% of lithium demand by mid-century.
The company estimates the investment requirements to commission new mines, build refining infrastructure and establish regional supply chains at between $104 billion and $276 billion, depending on a specific scenario.
Theodor Lisovoy, Managing Editor, Rough&Polished
