Electric Vehicles Drive Up Demand for Lithium
Lithium (Li), a key raw material for the production of electric vehicle batteries, maintains its status as a hot commodity in 2024. Its price exploded by 48% in 2022 and this trend continued in 2023 with another significant increase. The driving force remains the global boom in electric vehicles, with sales in 2023 up 66% and further growth expected in the current year.
Lithium production has increased, but is still not enough to meet the growing needs of electric vehicle manufacturers
However, as in the previous period, in 2024, the demand for lithium is struggling with a limited supply. Although production increased in 2023, it is still not enough to meet the growing needs of electric vehicle manufacturers and other industries. Analysts therefore continue to predict rising lithium prices.
Analysts’ optimism: even $100,000 per ton of lithium
Optimists like Joe Lowry of Global X ETFs continue to stand by their prediction of a tripling of the price in the next three years. Even more ambitious is Susannah Streeter of Hargreaves Lansdown, who still sees a target price of $100,000 per ton.
Lithium is an attractive investment opportunity, but with risks
These predictions are attracting investors and lithium remains an attractive investment opportunity in 2024. However, it is also necessary to mention the risks. The price of lithium is still known for its volatility and can plummet in the event of a worsening geopolitical situation or a slowdown in the growth of demand for electric vehicles.
Before you invest
Before you decide to invest in lithium, carefully consider all the risks and do your own market research. While lithium offers the potential for high returns, it is not without risk.
Key Information about Lithium
The largest buyers of lithium in 2023 include:
- Battery manufacturers:
- China: CATL, BYD, CALB
- Japan: Panasonic, Sony
- Korea: LG Chem, Samsung SDI
- USA: Tesla, Ford, GM
- Electric vehicle manufacturers:
- China: Tesla, BYD, NIO, Xpeng
- USA: Tesla, Ford, GM
- Europe: Volkswagen, Renault-Nissan, Daimler
- Japan: Toyota, Nissan
- Other industries:
- Chemical industry: Used in the production of ceramics, glass and aluminum.
- Pharmaceutical industry: Used in some medicines.
- Plastics production: Used as a stabilizer.
Demand for lithium from these industries is expected to increase significantly in the coming years.
The largest lithium producers in 2023 were:
- Australia: Albemarle, Pilbara Minerals, Galaxy Resources
- China: Tianqi Lithium, Ganfeng Lithium, Jiangxi Ganfeng Lithium
- Chile: SQM, Albemarle
- Argentina: Livent, Orocobre
Lithium production is expected to increase in the coming years, but will still not keep pace with growing demand.
