Lithium Supply And Challenges

- Jun 06, 2018-

There are a number of challenges that are likely to impact lithium supply in the future. Although there is sufficient amount of lithium resources available globally to meet the demand, almost 70% of the global lithium deposits are concentrated in South America's ABC (Argentina, Bolivia and Chile) region. This poses an inherent risk due to the accessibility of the raw material that is available only in a specific geography. Unrest or instability of the governments in these regions can greatly affect the supply and have impact on the battery price and in turn, the vehicle cost.

Lithium is also consumed by a number of other applications or sectors like construction, pharmaceuticals, ceramics and glass and so far the consumption by the automotive industry has been only a small fraction. At present, batteries account for only about one quarter of the current lithium consumption, which is expected to reach about 40% by 2020. Lithium constitutes only a small portion of the cost among other raw materials needed for battery manufacturing. However, with more than one million EVs expected by 2015, there will be a significant pressure on lithium suppliers to cater to demand.