Demand for lithium is expected to more than double by 2024, as the production of electric vehicle (EV) batteries is set for substantial growth, says data and analytics company GlobalData.

Demand for lithium is expected to rise at a 25.5% compound annual growth rate, from a forecast of 47 300 t in 2020, to 117 400 t in 2024, GlobalData says, basing its projection on EV production expanding from 3.4-million in 2020 to 12.7-million in 2024 and battery production growing from 95.3 GWh to 410.5 GWh over the same period.

Strong growth is forecast in China, which is determined to boost EV sales, targeting a 20% share of the new car sales by 2025. “The country’s decision to cut subsidies in a phased manner until 2022, rather than eliminating it in 2020, is expected to provide an essential boost to the domestic market, as well as the overall global EV market,” says GlobalData senior mining analyst Vinneth Bajaj.

China’s lithium-ion battery manufacturing capacity is expected to increase from an estimated 388.2 GWh in 2020 to 575.3 GWh in 2024.

On its Battery Day, US EV manufacturer Tesla announced it is working towards achieving 100 GWh of cell production capacity by 2022 and up to 3 000 GWh by 2030. This is far greater than other manufacturers such as China’s BYD, which is expected to expand its capacity to 126 GWh in 2024, versus 40 GWh in 2019. Japan’s Panasonic, a key supplier to Tesla itself, is expected to increase its capacity from 40 GWh in 2019 to 63 GWh in 2021, while LG Chem will expand from 65.2 GWh in 2019 to 172.4 GWh in 2024.

Bajaj states that lithium production over the next four years will be supported by output from existing Australian mines, such as Mount Cattlin and Pilgangoora. Other major mines include Mount Marion, Salar de Atacama and Salar del Hombre Muerto located in Australia, Chile and Argentina, respectively.

“Lithium metal production is expected to reach 134 700 t versus 58 800 t in 2020. This follows a significant 18.2% decline in 2019 to 78 200 t, resulting from sluggish global EV sales and a steep fall in prices, which, in turn, encouraged reduced production levels.”