Global Lithium Supply Forecast to Hit 1 Million Tonnes for the First Time

Global Lithium supply is set to pass One million tonnes for the first time this year, Benchmark forecasts, driven by growth in existing projects as well as new supply in China, Africa and the Americas. By the end of 2023, world supply of Lithium will be more than double 2021’s output.

The global demand for batteries is increasing, driven largely by the imperative to reduce climate change through electrification of mobility and the broader energy transition. In 2019, a joint publication report by McKinsey, Global Battery Alliance (GBA) and the Systemic, projected a market size of 2.6 TWh and yearly growth of 25 percent by 2030.

But a 2022 analysis by the McKinsey Battery Insights team projects that the entire Lithium-ion (Li-ion) battery chain, from mining through recycling, could grow by over 30 percent annually from 2020-2030, when it would reach a value of more than $400 billion and a market size of 4.7 TWh.

The battery growth will confer many environmental and social benefits, but many challenges will lie ahead. To avoid shortages, battery manufacturers must secure steady supply of both raw material and equipment. They must also channel their investment to the right areas and execute large-scale industrialization efficiently. Battery manufacturers should play offense, not defense, when it comes to green initiatives. Companies must also commit to extensive decarbonization and true sustainability.

McKinsey & Company, January 16, 2023)