How EV Development is Driving Lithium Demand and Innovation

Energizing the future: Unpacking the vital link between electric vehicles and lithium innovation.


As nations around the globe pledge to reduce their carbon footprints, electric vehicles (EVs) have surged to the forefront of this transformative movement, promising a cleaner, more sustainable future. But behind EVs' sleek designs and whisper-quiet engines lies the unspoken hero of this revolution: lithium. This vital element is not only fueling the rapid expansion of the EV market but also driving significant advancements in battery technology and sustainable mining practices.

In this blog post, we'll explore how the development of electric vehicles is intricately linked to the demand for lithium. From the mines to the highways, we're on a journey to discover how the push for electric vehicles is reshaping industries, economies, and environmental policies worldwide.

Table of contents:

More Vehicles on the Road

Over the past decade, we've seen a dramatic increase in both internal combustion engine (ICE) vehicles and electric vehicles (EVs) on the road. In 2010, the world had approximately 857.7 million ICE vehicles. This number grew to over 1.46 billion by 2023, reflecting the continuing demand for personal and commercial transportation worldwide.

Several factors contribute to the growing number of vehicles on our roads. Economic growth in emerging markets is a significant driver, as rising incomes enable more people to afford personal vehicles. Urbanization trends also play a role, as people moving to cities seek convenient transportation options. Furthermore, commercial vehicle demand has escalated in response to the global increase in consumer goods consumption, necessitating more vehicles for transportation and delivery services.

However, a transformative shift is observed in the adoption of electric vehicles. From a mere 60,000 EVs in 2011, the number surged to an impressive 41.78 million by 2023. This surge is not just a testament to changing consumer preferences but also to the advancements in EV technology, increasing awareness of environmental impacts, and governmental policies promoting sustainable transportation solutions. The projected figures for 2024 estimate nearly 58.48 million EVs on the road, underscoring a rapid growth trajectory.

EV Skepticism? Exponential Growth in EV Sales

The electric vehicle (EV) market is currently experiencing a period of unprecedented growth. In recent years, sales have skyrocketed, with more than 10 million EVs sold in 2022 alone. This momentum continued into 2023, when sales reached an impressive 14 million units, marking a robust 35% increase from the previous year. Such growth clearly indicates a rapidly maturing market, with EV sales more than quadrupling from 2020 to 2023. In a decade, global sales have escalated from a mere 230,000 units in 2013 to an impressive 14 million in 2023. This surge represents a dramatic increase of almost 6000% in just ten years, marking a significant shift in consumer and industry adoption of green technology.

Regional EV Sales Growth Highlights

The surge in electric vehicle (EV) sales is a global phenomenon, reflected in significant year-over-year (YoY) growth across key markets from 2022 to 2023:

  • China: Sales increased from 6.18 million to 8.41 million units, with a growth rate of 36.1%, driven by strong government support and a robust EV manufacturing sector.
  • Europe: Sales rose from 2.68 million to 3.15 million units, marking a 17.3% increase, supported by stringent emissions regulations and consumer incentives.
  • United States: Sales jumped from 1.10 million to 1.62 million units, achieving 46.5% growth, fueled by federal incentives and automakers' commitment to electrify their fleets.
  • Other Regions: This diverse category saw the most significant increase, with sales climbing from 556,000 to 1.01 million units, an 81.0% growth, indicating a rising global interest in EVs.

Despite the evident upward trend, the EV market does face skepticism. Critics often cite concerns about battery life, charging infrastructure, and the upfront costs associated with purchasing an electric vehicle. However, ongoing technological advancements rapidly address these issues, improving battery efficiency and lifespan while expanding charging networks. Moreover, as production scales up and technology advances, the cost of EVs is gradually decreasing, making them more accessible to a broader audience.

As the market continues to expand and evolve, the initial concerns about EVs are quickly becoming outdated. The future of transportation is electric, and it is unfolding at an unprecedented pace.

Key Points:

  1. Sustained Growth: From 2020 to 2023, the EV market saw a more than fourfold increase in sales, climbing from 3 million to over 14 million. This trend is set to continue, with projected sales nearing 17 million units by 2024, equating to a year-over-year growth rate of 18%.
  2. Government Incentives and Policies: A substantial driver behind this upswing is the array of national policies and incentives to reduce carbon emissions. Governments worldwide offer subsidies, tax breaks, and support for infrastructure development, making EVs more accessible and appealing to a broader audience.
  3. Technological Advancements: Battery technology and charging infrastructure innovations have also played a critical role. Improved battery life and reduced charging times enhance the practicality of EVs, effectively addressing two of the most significant barriers to consumer adoption.
  4. Environmental Awareness: Rising global awareness about environmental issues pushes consumers towards more sustainable choices. EVs, significantly cleaner than their gasoline counterparts, benefit from this shift.
  5. Market Confidence and Investment: The continuous investment from automakers into the development of new EV models and the expansion of production capacities signal a strong market confidence in the sustainability of EV growth.
Global EV Sales And Yoy Growth

Rapid Gain in Market Share by Electric Vehicles

Electric vehicles (EVs) are rapidly carving out a significant slice of the global automotive market, underlining a shift in consumer preference and industry momentum towards more sustainable transportation options. The share of EVs within the total passenger vehicle market has shown remarkable growth from 2020 to 2023, a clear indicator of their increasing acceptance and integration into the mainstream market.

In 2020, EVs accounted for approximately 4.4% of global passenger vehicle sales. However, by 2023, this figure had risen to almost 20%. This growth in market share is not merely a reflection of increasing sales volumes but a significant shift in market dynamics. Consumers are increasingly opting for EVs over traditional internal combustion engine vehicles, driven by environmental awareness, evolving regulatory landscapes, and important advancements in EV technologies.

Looking ahead, for instance, in the U.S., according to S&P Global Mobility, electric vehicle sales could account for 40 percent of total passenger car sales by 2030. More optimistic projections foresee EV sales surpassing 50 percent by the same year, particularly in regions with strong regulatory support for environmentally friendly transportation options. These projections are even higher in other regions.

The surge in EV market share is particularly notable against the backdrop of the overall automotive market, which has seen various fluctuations driven by economic factors such as supply chain disruptions and changing consumer behaviors post-pandemic. Despite these challenges, the EV sector has not only sustained but significantly enhanced its market presence.

EV Market Share Of Sales
Evs Market Share Of Fleet

North America – EV Sales Share

In North America, the transition to electric vehicles is gaining momentum due to stringent emission regulations, growing consumer awareness, and substantial investments in EV infrastructure. The United States and Canada are seeing a surge in EV sales, supported by federal incentives such as tax credits and grants for EV purchasers and manufacturers. In 2023, EVs made up 9% of new vehicle sales, with projections increasing to 12% by 2024 and dramatically rising to 39% by 2030. This surge reflects major American automakers' commitments to electrifying their fleets, signaling a significant reduction in combustion engine vehicles.

Europe – EV Sales Share

Europe is a global leader in the electrification of transport, with EVs representing 21% of new car sales in 2023, increasing to 25% by 2024 and a remarkable 62% by 2030. Countries like Norway, Sweden, and the Netherlands show some of the highest EV market penetrations. The European Union's aggressive carbon reduction targets have led to strong government support for EVs, including consumer subsidies and heavy investments in charging infrastructure. European automakers are at the forefront, driven by the EU's stringent emissions standards and the push towards achieving a climate-neutral continent by 2050.

China – EV Sales Share

China is the world's largest market for electric vehicles, driven by government policies favoring EV technology, including significant subsidies and stringent quotas for manufacturers. In 2023, EVs accounted for 32% of new car sales, expected to rise to 40% in 2024 and an astounding 62% by 2030. This growth is underpinned by the Chinese government's push for "new energy vehicles" to reduce urban pollution, decrease reliance on imported oil, and build domestic technological capabilities. China's vast manufacturing sector and control over the global supply of critical raw materials for batteries, such as lithium, position it uniquely in the global EV market.

Electrified Mobility: Displacing Conventional Vehicles

The shift from conventional vehicles to electric vehicles (EVs) is a pivotal trend in global transportation, driven by growing environmental concerns, technological advancements, and supportive government policies. 

The global shift towards electrified mobility is evident across North America, Europe, and China, each region propelled by a mix of regulatory frameworks, consumer preferences, and strategic economic policies. The increasing percentages of EV sales in these regions, which directly contribute to the reduction of carbon emissions, highlight a robust move towards fostering sustainable transportation solutions. As these regions continue to invest in and promote electric vehicles, they not only contribute to the global reduction of greenhouse gases but also stimulate innovations in battery technology and electric drivetrains.

This transition to electrified mobility is crucial for achieving global environmental goals and represents a significant growth opportunity for industries involved in the EV ecosystem, including sustainable lithium extraction and battery production.

Are EV Batteries Getting Bigger?

As the EV market expands, technological advancements in battery design and materials lead to larger and more efficient batteries. This trend not only enhances the performance and range of EVs but also significantly impacts lithium demand due to increased energy density and battery longevity.

Increasing Battery Sizes and Lithium Demand

The average size of lithium-ion battery packs in EVs has been growing approximately 10% annually, escalating from 40 kilowatt hours (kWh) to over 60 kWh in recent years. This increase in battery capacity means that a single EV now requires more lithium carbonate equivalent (LCE), with consumption per battery surging by 1.5 times by 2023. Modern EVs showcase a wide range of battery sizes, varying from 30 kWh in small vehicles to as much as 200 kWh in larger electric trucks.

The Critical Role of High-Quality Lithium

The shift towards larger battery capacities underscores the growing need for high-quality lithium. As batteries get bigger and more capable, the purity and performance of the lithium used become critical. High-quality lithium ensures better efficiency and longevity of batteries, which is crucial for meeting consumer expectations and regulatory standards.

The growing size of EV batteries reflects a clear trend towards vehicles that offer longer ranges and more reliable performance. This progression, while increasing lithium demand, also highlights the importance of advancements in battery technology and the essential role of sustainable lithium extraction in supporting the future of electric mobility.

Average Battery Size Growth

Reevaluating Lithium Demand Projections?

As EV batteries' size and capacity increase, so does the demand for lithium, potentially exceeding earlier estimates. This raises important considerations:

  • Are Analysts Keeping Up? Not all market analysts have fully accounted for the rapid growth in battery size and its implications on lithium demand.
  • Sustainable Supply Strategies: The escalating demand underscores the necessity for sustainable lithium extraction methods. Companies specializing in environmentally responsible lithium production are vital for meeting this surging demand without compromising ecological standards.

Is the rising demand for lithium a looming challenge, or does it present a hidden opportunity for innovation in extraction and recycling?

What strategies can industries implement to balance increased lithium demand with environmental stewardship and supply stability?

Lithium: Powering the Future of Electric Vehicles

Lithium is the cornerstone of modern electric vehicle (EV) technologies, imbuing it with unparalleled importance in our shift toward sustainable transportation. The element's unique properties, such as high electrochemical potential and lightweight, make it suited for lithium-ion batteries. These batteries are preferred for EVs due to their high energy density, longer life span, and ability to sustain numerous charge/discharge cycles.

The rapid increase in EV adoption, propelled by a global commitment to environmental sustainability and robust policy support, is triggering a simultaneous surge in lithium demand. Scenario analysis indicates a significant rise in lithium demand as battery sizes grow to meet consumer preferences for vehicles with extended ranges. The demand for Lithium Carbonate Equivalent (LCE) under different future scenarios presents a striking variation:

  • In the base case scenario, which assumes steady growth in EV adoption without significant technological breakthroughs, LCE demand is projected to rise 84% from 2025 to 2030 and over 195% from 2025 to 2035.
  • The growth case scenario, reflecting an optimistic surge in EV uptake and larger battery capacities, projects a more pronounced increase. Here, LCE demand is expected to jump 174% from 2025-2030, soaring to an impressive 289% by 2035 from 2025 - a nearly 50% increase compared to the base case for that year.
  • Conversely, the decline case, which contemplates a slowdown in EV market penetration, predicts a more moderate growth, with LCE demand reaching 84% by 2030 from 2025 and 164% from 2025-2035.

These projections paint a clear picture: as battery technologies advance and battery pack sizes enlarge, the demand for lithium will inevitably surge. This trend not only reflects the growing preference for EVs with extended range but also underscores the strides in battery technology that enhance the capabilities of lithium-ion batteries.

Sustainable lithium extraction from oilfield wastewater
LCE Demand Forecast In Different Battery Pack Growth Scenarios

Looking Forward: The Future of EVs and Lithium

As we navigate deeper into the 21st century, the interplay between electric vehicle (EV) development and lithium demand is poised to become even more pivotal. With global initiatives amplifying the push for renewable energy sources and reducing carbon emissions, EVs stand at the forefront of this transformative era. Given its critical role in battery technology, this transition will inevitably drive an upward trajectory in lithium demand.

In summary, the future of EVs and lithium is intrinsically linked and mutually reinforcing. As we progress towards a more electrified automotive landscape, the demand for lithium will continue to rise, guided by advancements in battery technology, regulatory frameworks, and global market dynamics. However, it's crucial to remember that the ability to adapt to these changes and innovations in sustainable lithium sourcing and recycling will be critical for sustaining the momentum in the EV market and for us to make responsible choices for the environment.

  • Technological Advancements in EVs

    The future of EVs will likely be shaped by significant technological advancements that improve battery efficiency, capacity, and charging times. As automakers invest in next-generation battery technologies, which promise higher energy densities and faster charging, the demand for lithium could experience shifts in volume and extraction methods. If these new technologies can leverage lithium more efficiently or require different lithium-based compounds, we may see an evolution in the lithium supply chain and extraction techniques for cleaner and more sustainable lithium.

  • Increasing EV Adoption Rates

    The adoption rates of EVs are expected to accelerate globally, influenced by stricter emissions regulations, decreasing battery costs, and growing consumer awareness of environmental issues. This will likely result in a continuous increase in lithium demand as more consumers transition from internal combustion engine vehicles to EVs. For instance, if EV sales grow to represent 40% of total vehicle sales by 2030 or even more, the corresponding rise in lithium demand could be exponential, emphasizing the need for scalable and sustainable lithium extraction methods.

  • Policy and Regulatory Impact

    The role of government policies and regulations in shaping the demand for EVs and lithium cannot be overstated. Incentives for EV purchases, investments in charging infrastructure, and regulations limiting the use of fossil fuels are powerful tools that can significantly boost EV adoption. Moreover, environmental regulations impacting mining practices may also influence lithium production, pushing the industry towards more sustainable and less invasive extraction technologies, such as those extracting lithium from oilfield brine. These measures provide a stable and predictable environment for the future of EVs and lithium.

  • Global Supply Chain Dynamics

    The geopolitics of lithium mining and the global supply chain are also critical factors to consider. As demand surges, securing a stable and ethical lithium supply becomes paramount. This might lead to new alliances and possibly conflicts over lithium-rich territories. Moreover, innovations in recycling lithium from used batteries could significantly affect demand dynamics, offering a sustainable alternative to mining that could meet a part of the global lithium demand.