The Electric Vehicle revolution is by far the biggest demand driver for this much sought after commodity. Electrification and battery technology is a fast moving area of industrial activity, with battery powered electric forms of transportation stretching across not just mass market passenger car transport, but into commercial vehicles, busses and more recently the aviation sector where new battery powered electric aircraft are set to enter the market.

In terms of other industrial demand sectors, Lithium is widely used in, ceramics and glass, electrical and electronic, lubricating greases, metallurgy, silicon nano-welding, pyrotechnics, air purification, optics, organic and polymer, chemistry, military, nuclear and medicine.

The Market for Lithium is Looking Good
The only way is up for Lithium demand. Electric vehicle (EV) demand will continue to drive the Lithium market forward: EV penetration will reach 15% in 2025, and we expect to see it rise to around 35% by 2030. Add to that mix growing demand from applications such as energy storage systems (ESS), 5G devices, and Internet of Things (IoT) infrastructure.

EV sales (BEV & PHEV)
The main takeaway here is that the EV market faces many decades of strong, compound growth. For any supply chain that relies on getting raw materials out of the ground, it is going to be a supreme challenge to keep up with year after year of high compound growth. For example, 25% growth on 300,000 tonnes LCE, means an extra 75,000 LCE is needed the following year and the year after that an extra 93,750 tonnes, on top of the previous year’s 75,000 tonnes, is needed. And, in this example we are only talking 25% CAGR, but growth in the early years could be a lot faster. 

What’s the Lithium supply-demand outlook out to 2030? 

The underlying market fundamentals for lithium are straightforward: Increasing and sustained demand will strain supply through 2030. Between now and 2025, supplies from current and planned projects are expected to come online to meet demand; and from 2025 to 2030 new supply sources must come online to support demand. 

Lithium supply-demand balance 2010-2030

Looking ahead to 2030, rapidly growing demand will test the market’s ability to expand supply and reduce lead times. But we believe the market will ultimately respond, and demand will calibrate to available supply.

Source
https://www.fastmarkets.com/article/3999803/lithium-supply-and-demand-to-2030