Wood Mackenzie: Lithium Deficit Starts 2028
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- Wood Mackenzie modeled four energy transition pathways and found lithium demand could reach 13.2 million tonnes LCE by 2050 under net zero, with supply deficits emerging as early as 2028.
- Allan Pedersen, Wood Mackenzie's research director, said the lithium market is heading into a supply crunch "much sooner than many industry players expect," with deficits from 2028 under ambitious climate scenarios.
- Electric vehicles account for 72% to 80% of lithium demand across all four scenarios, climbing to 95% of global vehicle sales by 2040 under a net zero pathway.
- Recycling is projected to grow 13% to 16% annually but will only supply 2.3-2.7 million tonnes LCE by 2050, still leaving a 6.7 to 8.5 million tonne shortfall depending on scenario.
- Capital investment needs range from $104 billion under a delayed transition to $276 billion under net zero, with mining and refining spending expected to peak between 2030 and 2034.
- Energy storage systems add 6% to 7% annual demand growth on top of EV pull, as renewable-heavy grids require more large-scale batteries to balance supply and demand.
Why it matters: The lithium industry must mobilize $104-276 billion over the next decade to avoid supply deficits that begin as early as 2028, with EVs and grid storage competing for the same constrained material. With 72-80% of demand tied to EVs and governments legislating net zero timelines, any mining or refining shortfall directly threatens the pace of the global electrification transition.
