Major lithium producers SQM, FMC and Albemarle are ramping up production, but such efforts are expected to fall short of looming demand, Barrel Energy noted.
Goldman Sachs predicted that market consumption could very well triple current production by 2025.
Just a 1% increase in electric vehicles could increase lithium demand by about half of current lithium production.
For lithium, lithium-ion batteries have become the rechargeable battery of choice in mobile phones, computers, electric cars, and large-scale electrical storage.
Growth in demand for lithium batteries is also projected to far outpace lithium production in the next decade.
In particular, lithium-ion batteries for the automotive industry are expected to push demand to almost unusable levels.
Lithium is primarily extracted from two sources: hard rock spodumene and pegmatite crystals, and dissolved lithium salts from brine pools. Currently, the main world producers of lithium are in Australia, Chile, Argentina and China.
According to the American Battery Metals Corporation, excluding the United States, global lithium production totaled approximately 82,000 tons in 2020, with the top four countries (Australia, Chile, China, Argentina) contributing around 95% of global production.
Most of the world’s lithium supply is produced by five companies: Albemarle Corporation, FMC Corporation/Livent, Chile’s Sociedad Quimica y Minera de Chile (SQM), Ganfeng Lithium and Tianqi Lithium.
For their part, Albemarle, FMC and SQM have traditionally been considered the “big 3” of global lithium producers.
FMC Corporation spun off its lithium production to Livent in 2018.
In 2020, the market share of “Big 3” companies decreased from 85 to 53%, with Chinese companies reaching 40% market share.
Tesla’s mile-long Gigafactory began producing powerful lithium-ion batteries in 2017 with partner Panasonic.
The Gigafactory is expected to supply batteries for the 500,000 cars Tesla hopes to produce by the end of the decade, as well as for homes.
In addition, Chrysler, Dodge, Ford, GM, Mercedes-Benz, Mitsubishi, Nissan, Saturn, Tesla, and Toyota have announced plans to build lithium-ion battery cars.
Pre-orders for the new Tesla Model 3 have sold out at 400,000 and are currently in production. Elon Musk has stated that Tesla will have to acquire the entire lithium market to meet current demands.