Lithium shortages could hit by 2028 as EV demand surges
Why it matters: The looming lithium shortage threatens to derail global clean energy ambitions and the widespread adoption of EVs unless immediate and substantial investments are made in new supply.
- Wood Mackenzie predicts lithium demand could reach 13 million tonnes by 2050 in a net-zero scenario, with deficits starting as early as 2028.
- Electric Vehicles (EVs) are the primary driver, accounting for 72% to 80% of lithium demand across all scenarios, with sales potentially reaching 95% of global vehicle sales by 2050 in a net-zero pathway.
- Energy storage systems also contribute to rising demand, with an anticipated 6% to 7% annual growth as renewable energy integration requires more grid-scale batteries.
- Recycling will play a growing role, projected to increase 13% to 16% annually, but will not provide meaningful supply volumes until the 2040s, failing to address near-term shortages.
- Significant investment of $104 billion to $276 billion is required to close the projected supply gap, which could reach 8.5 million tonnes by 2050 under a net-zero pathway.
The global lithium market faces an imminent supply crunch, with shortages potentially emerging as early as 2028 under ambitious climate scenarios, driven primarily by surging electric vehicle (EV) demand. Wood Mackenzie warns that without massive new investments—estimated between $104 billion and $276 billion—the industry will struggle to meet the projected 5.6 to 13.2 million tonnes of lithium demand by 2050, even with future recycling efforts.
