Europe and the US are facing a significant challenge regarding lithium supply for electric vehicle batteries. According to new research, the projected lithium production in these regions is unlikely to meet the growing demand by 2030, despite anticipated increases in output.
Demand for lithium is highest in China, Europe, and the US, but the majority of lithium extraction occurs outside these areas, such as in Argentina near the Andes mountains. China is expected to maintain its dominant position in the market due to its superior access to imported lithium and advanced refining capabilities, along with a substantial domestic electric battery industry. André Månberger, a senior lecturer at Lund University in Sweden and a co-author of the study, notes, “China is currently completely dominating.” He adds that this dominance makes it challenging for the US and Europe to significantly ramp up their imports in a short timeframe.
The 17 UN Sustainable Development Goals, published in 2015, highlight the potential for increased electric vehicle usage to contribute to seven of these goals. However, with lithium being a critical component in electric vehicle production, ensuring a stable supply is crucial. While global lithium demand is primarily centered in China, the US, and Europe, most natural lithium resources are located elsewhere. Australia holds the largest known lithium deposits, contributing about 50% of the world’s supply. Despite China’s recent announcement of a significant lithium deposit discovery in the Qinghai-Tibet Plateau, it still relies on imports for the bulk of its lithium needs.
Jack Lifton, co-chairman of the Critical Minerals Institute in the US and an expert on critical minerals economics, emphasizes that China has been more strategic in planning its electric vehicle industry compared to the US and Europe. He states, “They went out and bought mines everywhere around the world,” mentioning China’s co-ownership of the largest hard rock lithium mine in Australia. Over the past two decades, China has developed the capacity to transform mineral resources from mines into end-user components for batteries and electric motors.
Since 2015, when electric vehicle sales accounted for 1% or less of the market in these regions, there has been remarkable growth. Electric vehicles now represent approximately 50%, 20%, and 10% of market share in China, Europe, and the US, respectively. The current study forecasts that lithium demand will rise in all three regions over the next five years. Lithium production is also expected to increase significantly, with maximum outputs projected to reach 1.2 million, 325,000, and 610,000 tonnes in China, Europe, and the US, respectively, by 2030. However, domestic supplies are not expected to satisfy this demand, with Europe facing the largest potential shortfall of around 718,000 tonnes in a low-supply scenario.
Lifton points out a critical issue: the recent collapse in lithium prices has led many mining companies to reduce or close operations. “The probability of profitability has to be greater than 50% for them to start something,” he highlights, noting the high costs associated with mining, especially for less common metals.
Månberger and his colleagues propose several potential solutions, such as promoting research into sodium-based alternatives, reduced lithium usage, or smaller batteries, along with increased lithium recycling. However, they acknowledge that the technology for these alternatives will require time to develop. Lifton expresses skepticism about breaking China’s dominance in the lithium and electric vehicle markets anytime soon. “In five years, the Chinese will be as dominant in battery materials as they are today,” he asserts. “Even if everybody started to develop their lithium deposits this minute, they wouldn’t be in production yet. The Chinese have about a one-generation lead on us.”
References:
Q Xia et al, Cell Rep. Sustainability, 2025, 2, 100404 (DOI: 10.1016/j.crsus.2025.100404)
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