Growing Competition in the Electric Vehicle Market Increases Demand for Lithium

This article was authored by:

Carrie Carlson
Technical Writer

As a key supplier of lithium processing equipment, we’ve been monitoring the EV market closely. And if there was any uncertainty surrounding the EV market remaining, it has fallen to the wayside now, as countless manufacturers and entire nations make ever-larger commitments to electrified transportation. Everyone is doubling down on the production of electric vehicles. 

As the base technology behind EVs, lithium-ion batteries have become a hot commodity, making lithium the first component in a long supply chain that is going to help the world meet its climate goals. As the EV revolution kicks into high gear, one thing is clear: the world is in need of more lithium. 

EV Market Activity

The EV market has seen significant growth in recent years; InvestorPlace estimates that about 10% of all new car sales for 2021 will be EVs, up from 5% in 2020, 3.5% in 2019, and just 0.3% in 2016.  These numbers are supported by the record-high EV sales several car makers, Tesla among them, continue to report. 

Several factors are affecting the EV market, creating a smattering of headlines consisting of major announcements from car makers and nations making substantial commitments to EVs.

Ford recently announced a bold $11.4 billion investment to build two new facilities supporting EV production in the US. The two campuses, which will build both electric vehicles and the batteries needed to power them, are a significant step in the American EV industry. 

GM has made the statement that the car-making giant has its sights set on beating out Tesla in the EV market. The company previously announced their commitment to phase out production of their gas-powered vehicles completely by 2035. 

Tesla has been busy building gigafactories, and numerous other car companies have either released, or are working on EV models, including Cadillac, Subaru, BMW, Kia, Fisker, Mercedes Benz, Lucid, Ree, Polestar, VW, and more.  

China has been investing heavily in electric vehicles, and Europe wants to have a minimum of 30 million EVs on their roads by 2030. In the US, the infrastructure plan is also expected to push demand for EVs, if passed. 

The Thai government also recently announced their plans for increasing EV production to 30% of its total car-making capacity by 2030. The nation is also determined to have 10,000 charging stations in place by 2025.

The Need for More Lithium

Widespread adoption of EVs would not be possible without lithium-ion batteries, and meeting this deluge of demand for electric vehicles will require a lot of lithium, so much so that many industry analysts are wondering if there will be enough to keep the EV movement going at full speed. 

Reuters reported Benchmark Mineral Intelligence (BMI) analyst George Miller as saying, “If new lithium doesn’t start coming to market, we might start to see electric vehicle production rates hamstrung by a lack of raw material supply.” 

The issue is not whether there is enough lithium on earth to meet demand, but whether the industry can pump enough lithium into the supply chain in time to feed the boom. Previously unfavorable market conditions led to a halt in lithium mining activities, essentially stalling any additional capacity from coming online. Now, demand is picking up at a record pace thanks to the rush on EVs. 

Changes in the Lithium Market

Several mining companies have seen the writing on the wall, with newcomers and veterans alike scrambling to get their hands on the lightweight metal as quickly as possible. 

New Players and Expansions

Rio Tinto, for example, entered the lithium market in summer 2021 with the announcement of their intent to build a new lithium mine in Serbia. Albemarle announced at the start of 2021 that they intended to double capacity for brine extraction at their Nevada operation. The lithium giant also recently announced they’d be acquiring a lithium converter in Guangxi, China to bolster their capabilities.

Argentina, already a major source of lithium, is working on regulatory changes to encourage faster development of the region’s lithium resources. Other countries are also exploring their options to take advantage of their lithium resources. 

New Sources of Lithium

The exploding demand for lithium has also led many to explore extracting it from more novel sources.

Researchers recently set out to recover lithium from the wastewater generated during oil and gas production using a new polymer membrane. Other research on extracting lithium from seawater has also been making waves. 

Lithium Battery Recycling 

Lithium-ion battery recycling will also likely become an important source of lithium in the future, as used batteries start flooding the market. Research firm MarketsandMarkets predicts the lithium battery recycling market will see a whopping CAGR of 19.6% from 2021-2030.


As more and more countries and companies step up to the plate to commit to electrified transportation, the lithium market could face an impending shortage if new production doesn’t come online quickly. New and expanded production, along with potential new sources and a growing recycling market, however, could help to relieve some of the pressure. 

FEECO is a leading supplier of custom rotary kilns for lithium production and, battery recycling, as well as other lithium processing equipment and comprehensive parts and service support. For more information on our capabilities, contact us today!

About the Author . . .

Carrie Carlson is a technical writer and visual designer.

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