Global lithium demand could more than double by 2050, potentially reaching 13 million tonnes – if the energy transition accelerates.
Wood Mackenzie research suggests supply deficits could appear as early as 2028, requiring up to $276 billion in new investment to keep pace with demand.
“The lithium market is heading into a supply crunch much sooner than many industry players expect,” Wood Mackenzie research director Allan Pedersen said.
“Under ambitious climate scenarios, we see deficits emerging from 2028. The industry needs to act now should governments progress policies towards net zero. Projects approved today will determine market balance in the critical 2030s.”
Wood Mackenzie models four energy transition pathways, showing lithium demand in 2050 ranging from 5.6 million tonnes under a delayed transition to 13.2 million tonnes under a net zero scenario.
Electric vehicles remain the main driver, accounting for 72–80 per cent of lithium consumption, while energy storage systems are projected to grow at 6–7 per cent annually as renewables dominate new power capacity.
“EVs remain the primary driver of lithium demand growth, but energy storage systems (ESS) are the sleeper story,” Wood Mackenzie senior research analyst Rebecca Grant said.
Even with increasing contributions from recycling, near-term shortages are likely, with meaningful recycled volumes emerging only in the 2040s. Under the Net Zero scenario, the supply gap could reach 8.5 million tonnes of lithium carbonate equivalent by 2050.
Meeting this demand requires unprecedented investment. Wood Mackenzie estimates total funding needs ranging from $104 billion under a delayed transition scenario to $276 billion under a net zero scenario, peaking between 2030 and 2034.
“The question isn’t whether we need more lithium,” Peterson said. “It’s whether the industry can mobilise capital fast enough to meet demand while navigating an increasingly fragmented global trade environment.”
