EV market driving lithium demand

The burgeoning global electric vehicle market will drive lithium demand over the next five years, GlobalData says.

The demand for electric vehicles (EVs), which have emerged as a clean alternative to traditional vehicles, has picked up in recent years. the data and analytics company says.

It forecasts demand for lithium, needed for the production of lithium-ion batteries for EVs, will more than double from 26.7kt in 2018 to 58.3kt in 2022.

The global EV market is expected to grow at a substantial compound annual growth rate (CAGR) of 15.6% through to 2022, driven by the growing popularity of EVs across countries in Asia-Pacific (APAC) and Europe, according to GlobalData.

The company reveals China will lead the global EV market with more than 50% share and grow three times as fast as the US over the next five years.

This in turn, will result in increased consumption of lithium and support investment in mine expansions across Chile and Australia and new mine development in Chile, Australia, Argentina and Canada.

“Several national governments are encouraging the adaption of EVs by providing various tax incentives and subsidies to the manufacturers and end users,” GlobalData senior mining analyst Vinneth Bajaj says.

“Additionally, efforts to reduce greenhouse gas emissions have led to much technological advancement in EVs and made them a viable and safe alternative to traditional vehicles.”

In 2017, 1.1 million new EVs were sold globally, of which China accounted for over half, followed by the US with 17.3%.

In Europe, Norway accounted for 5.4% of global sales, followed by Germany (4.8%) and the United Kingdom (4.1%).

During the next five years, global EV sales are expected to increase to over three million vehicles, primarily driven by APAC and Europe. Meanwhile, EV sales in the US, Norway, Germany and Japan are expected to grow at CAGRs of 9.2%, 7%, 8.2% and 8.2% to reach 380,000, 107,000, 100,000, and 99,000 vehicles respectively in 2022. These numbers include battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs).

“The largest increase will be in China, which is expected to boost its EV sales from 579,000 in 2017 to 1.5 million by 2022,” Bajaj says. “Current government policies and subsidies are making China a lucrative market for industry investments due to which the country’s EV market is poised to grow three times as fast as the US during the outlook period.”