Lithium Market Size, Share & Industry Analysis, By Product (Carbonate, Hydroxide, Chloride, Metal, Fluoride, and Others), By Application (Batteries, Glass & Ceramics, Lubricant, Polymers, Metallurgy, Medical, Air Treatment, and Others), By End-User (Automotive, Consumer Electronics, Industrial, Energy Storage, and Others), and Regional Forecast, 2024-2032

The global lithium market size was valued at USD 22.36 billion in 2023. The market is projected to grow from USD 13.90 billion in 2024 to USD 55.52 billion by 2032 at a CAGR of 18.9% during the 2024-2032 forecast period.

Lithium is a silvery-white, soft, and highly reactive alkali metal. It is the lightest metal and least dense solid element under standard conditions. It is used to make alloys with aluminum and magnesium, which improves their strength and makes them lighter. These alloys are used in aircraft, bicycle frames, and high-speed trains. It is a key component of rechargeable batteries used in many devices, including laptops, smartphones, digital cameras, and electric vehicles (EVs). Lithium ion batteries (LIB) are popular because of their high energy density, which makes them a good choice for devices where weight and size are important.

Growing demand for rechargeable batteries in laptops and mobile phones and rapid advancements in electric vehicles are driving the demand for lithium ion batteries (LIB). Apart from lithium ion batteries, it is utilized in many industries, including lubricants, glass & ceramics, and foundry. Its crucial role in clean energy technologies, such as EVs and solar energy storage, along with a wide array of application areas, is anticipated to foster the global lithium market growth during the forecast period.  

Major companies such as SQM, Albermale Corporation, Tianqi Lithium Corporation, and Arcadium Lithium Co, Ltd. are driving market growth by inline organic and inorganic investments. The companies investing aggressively in order to leverage maximum potential from the market.

MARKET DYNAMICS

MARKET DRIVERS

Increasing Adoption of Electric Vehicles Will Aid Market Growth

The automotive industry's evolution over the past few years will have a massive impact on the Electric Vehicle (EV) market. EVs are designed to replace conventional traveling methods owing to technological advancements, low carbon emission, low maintenance, and smoother drive. Along with these advantages, the EV offers the convenience of charging at home, reduced engine sound, and high fuel economy. EVs can also save a significant amount of carbon emissions compared to gas-powered cars. According to some statistics, EVs emit 40% less CO2 than combustion cars over a car's lifetime. Therefore, EVs offer great experience and help to reduce GHG emissions. LiBs are used in the majority of all-electric and plug-in hybrid electric vehicles (PHEVs). LiBs are the most popular choice for Electric Vehicles (EVs) because they are cost-efficient and have a high energy density. Lithium is the primary ingredient in LiBs, and the growing demand for EVs and LiBs is expected to aid market growth naturally during the forecast period.

MARKET RESTRAINTS

Environmental & Ethical Concerns Associated with its Production & Processing May Impede its Market Expansion

Lithium extraction has a significant social and environmental impact, especially due to water depletion and pollution. Its production requires large amounts of water, which can divert water away from local communities and agriculture. For example, in Chile's Salar de Atacama, mining operations use around 65% of the region's water. The extraction process can also contaminate the water sources. For example, a lithium mining project in China leaked toxic chemicals into the Liqi River, killing fish and destroying grassland. In Argentina, locals claimed that the operations had contaminated the streams used by livestock and humans.

Also, toxic chemicals are required to process this metal, such as nickel, cobalt, manganese, copper, lead, and mercury. Toxic and flammable electrolytes containing LiClO4, LiBF4, and LiPF6 are used in LiBs. Releasing such toxic chemicals through air emission, leaching, or spills can harm the ecosystem, food production, and communities. Its mining, particularly through open-pit methods, leads to extensive land degradation. Large areas of land are cleared to make way for mining operations, destroying habitats and causing significant loss of biodiversity. Therefore, increasing environmental & ethical concerns associated with its production & processing may impede its market expansion.

MARKET OPPORTUNITIES

Momentum toward Energy Storage Will Create Remunerative Opportunities for Market Players

Energy storage systems enable the separation of energy used from energy produced, whether electrical or thermal. Electricity is usually stored through chemical means (like lead-acid batteries or LiBs, for example) or mechanical methods (such as pumped hydro storage). As the costs of solar and wind power technologies continue to decrease, a growing portion of renewable energy will become more common. Meanwhile, the adoption of electric vehicles is pushing forward the need to reduce carbon emissions in the transportation sector. This situation highlights the significant potential and importance of both electrical and thermal energy storage in supporting deep decarbonization efforts. Electricity storage systems that rely on the rapid advancement of batteries and other technologies will allow for more flexibility in the system, which is crucial as the proportion of renewable energy sources increases. LIBs are the most widely used type of battery for electrical and electromagnetic applications. Therefore, momentum toward energy storage and such massive growth in energy storage will create remunerative opportunities for market players.

GLOBAL LITHIUM MARKET TRENDS

Transition toward Sustainability and Recycling to Fuel Market Growth

Sustainable development requires an integrated approach that takes into consideration environmental concerns along with economic development. As the world shifts toward a greener and more sustainable future, the role of lithium is becoming more crucial in powering this transformation. It can be a sustainable energy source, but the process of mining and extracting it can have negative environmental impacts. In response to this, companies in the lithium market are implementing several sustainable practices to reduce the negative environmental impacts, such as improving the efficiency of production and material recovery systems.

More environmentally friendly extracting and recycling methods can help create a sustainable circular economy. Research is underway to improve the performance and sustainability of LiBs and to develop innovative ways to improve the recycling rates, reducing the associated costs. A circular economy for LiBs is a closed-loop system that reuses and recycles batteries to maximize the value of their raw materials and reduce waste. The circular economy can help conserve natural resources by reusing materials instead of depleting finite resources. It can also reduce energy usage, greenhouse gas emissions, and the environmental costs associated with mining and battery production.

Reducing energy inputs and using renewable energy sources can lower the carbon intensity of its production. Energy-recovery devices (ERDs) can reduce the amount of electricity needed to refine lithium salts. ERDs can also help keep nutrient-rich wastewater out of local water sources. For instance, Energy Recovery, Inc. offers a PX device that is designed to recover energy from wastewater, effectively capturing and reusing the pressure energy present in the wastewater flow, thereby reducing the energy required to increase the pressure of the wastewater entering the system. Such technological innovations in lithium extraction techniques will create a progressive environment for the market.

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IMPACT of COVID-19

Lockdown measures, economic uncertainty, and reduced consumer spending decreased sales of vehicles, building materials, and electronic devices, leading to lower demand for lithium. In 2020, the total weight of this metal imported into the U.S. witnessed a 6% decrease, while the total weight of exports experienced a 31% drop compared to the previous year. The average yearly cost per metric ton of lithium carbonate imported into the country fell by 20% from 2019, and the average yearly cost per metric ton of lithium hydroxide imported dropped by 35%. As the pandemic spread and intensified in Europe, numerous LIB production facilities halted production or significantly reduced output, impacting the entire automotive supply chain.

TRADE PROTECTIONISM AND GEOPOLITICAL IMPACT

Furthermore, according to the U.S. Geological Survey (USGS), the world has an estimated 88 million tons of reserves, but only one-quarter is economically viable to mine. Hence, at present, there is limited availability of reserves. In addition, global production is dominated by the three largest producers, including Australia, Chile, and China. As a result, there is over-reliance on these metals, which are concentrated in limited geographies. Therefore, any kind of supply chain bottlenecks, such as trade restrictions, tariffs, and geopolitical tensions, can create turbulence in lithium prices, creating various challenges for the market players.

SEGMENTATION ANALYSIS

By Product

Carbonate Segment Holds Dominant Share Due to Product Demand from Battery Industry

On the basis of product, the market is categorized into carbonate, hydroxide, chloride, metal, fluoride, and others.

Carbonate held a dominant global lithium market share in 2023. It is also known as lithium salt, preferably used for processing metal oxides. Lithium carbonate (Li2CO3) is a key component in LIB, used to produce cathode materials and electrolytes. Li2CO3 is widely used in the automotive industry owing to the increasing sale of electric vehicles, thus providing impetus to the growth of the market significantly over the past years. It is also used in the pharmaceutical industry to make medicines for treating patients who have bipolar disorder and to prevent cluster headaches. The efficacy of reducing the melting point of silica in ovenware glass and adding color and shine to ceramics has made it an essential ingredient in the glass & ceramic industry, fueling its demand.

Advances in batteries have created a huge demand for the hydroxide segment, which is expected to witness the highest CAGR during the forecast period. It is manufactured from varied sources such as petroleum hard rocks and brines. To leverage the growth potential of the hydroxide segment, several manufacturers globally are constructing plants to expand their business and secure a place in the value chain.

Another important product, chloride, is mainly used for the production of metal by electrolysis and is mainly utilized in the production of automotive components. It is also used in medicine, mainly for diagnosing diseases and in biochemical applications, which is expected to moderately drive its demand.

By Application

Batteries to Hold Majority Share Owing to Growing Demand from Consumer Electronics and EV Sector

On the basis of application, the market is segmented into batteries, glass & ceramics, lubricant, polymers, metallurgy, medical, air treatment, and others.

The batteries segment accounted for a majority market share in 2023 and will likely continue its dominance during the forecast timeframe. LIBs are used in many combinations of active materials for the cathode, electrolyte, and anode. They are either primary or secondary batteries. Primary batteries are used in cameras, calculators, electronic games, watches, computers, and other devices. In contrast, secondary batteries are used in portable computers, telephones, tablets, electric vehicles, cordless tools, and video cameras. A surge in electric vehicle sales due to a rise in per capita disposable income and user preferences is expected to drive the LIB market.

It increases the glass melt rate, lowers viscosity, and lowers melt temperature. This results in higher output, energy savings, and molding benefits. It lowers firing temperatures, lowers thermal expansion, increases the strength of ceramic bodies, improves viscosity for coating, and improves the glaze's color, strength, and luster. It is also responsible for the glass ceramic's low or near-zero thermal expansion, enabling its use in high-temperature ranges without voltage breakage. Attributed to its several advantages, it is widely used in glass & ceramic applications, driving its demand during the forecast period.

Lithium grease is a high-quality lubricant that reduces friction between moving parts and extends equipment's service life. It also offers high load-carrying capacity and is tolerant of high pressures, making it an ideal ingredient in many lubricant blends. As a result, the demand for the product in lubrication applications is set to grow moderately during the forecast period.

By End-User

Automotive Industry Dominates Market Due to Growing Preference for Hybrid and Electric Vehicles

On the basis of end-user, the market is segmented into automotive, consumer electronics, industrial, energy storage, and others.

The automotive industry is currently dominated by fossil fuel consumption but is increasingly moving toward alternate sources of energy, such as lithium-ion-backed battery technology. The increasing demand for Electric Vehicles (EVs) and the shift toward clean energy is expected to drive the product demand in the coming years. For instance, the Indian Ministry of Heavy Industries launched Phase II of FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) on 1st April 2019 with a total budgetary support of USD 1,200 million for five years. Such government initiatives are set to drive the batteries segment till 2032.

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The consumer electronics segment has grown exponentially in recent times. LIBs are used under rechargeable gadgets to store the proper energy-to-weight ratios and high open-circuit voltage. The advancement in battery technology is making electronic products more refined and slim, which makes higher use of batteries to increase the running time of products. In addition, these batteries have a high power density for more battery life in a lighter package. Hence, an increase in demand for smartphones and consumer electronics is expected to drive market growth.

Apart from automotive and consumer electronics, it is utilized in several industries for a wide range of applications, including, but not limited to, glass, ceramics, lubricants, air treatment, and others. Such a wide range of application areas is expected to fuel the demand at a moderate rate in the forthcoming years.

LITHIUM MARKET REGIONAL OUTLOOK

Asia Pacific

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Asia Pacific lithium market is estimated to hold the largest share of global sales revenue, owing to widespread product usage in the industrial sectors, including automotive, power, consumer electronics, chemical, general manufacturing, and others. The region is rapidly developing due to various government initiatives and increasing foreign investments in the industrial sector. The easy availability of raw materials, labor, and support from domestic governments are supporting the market growth.

Additionally, the presence of a large number of lithium-producing companies in emerging countries such as China, Taiwan, Japan, South Korea, and India is surging the demand for lithium. China is one of the largest producers of electronic components, such as fuel cells, batteries, and capacitors. There have been advancements in fuel cell technologies for electric vehicles that align with the rules set by the government to reduce the pollution that occurs due to the burning of petrochemicals and gasoline, which will create a progressive environment for the market.

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North America

The market in North America market is likely to rise considerably during the forecast period. The increasing adoption of cleaner energy sources due to stringent regulatory rules is surging regional growth. The Environmental Protection Agency (EPA) has various schemes and funding programs that support the usage of green and sustainable sources of energy, such as solar, wind, geothermal, and others. The increasing adoption of solar panels has created a substantial demand for cells and batteries to store energy.

Europe

Europe has witnessed significant industrial development in the past decade. The increasing investment of the European Union in R&D in the automobile, ICT, and healthcare sectors are a few factors driving market growth. Europe is massively investing to expand its energy infrastructure. For instance, to boost Europe’s battery manufacturing industry, the European Commission funded over USD 3 billion in December 2023 for the next three years.

Latin America

Latin America accounts for around 70% of the world’s lithium reserves, where the metal is used in rechargeable batteries for EVs and mobile phones. The "Lithium Triangle" is a region in the Andes that spans parts of Argentina, Bolivia, and Chile and contains about 50% of the world's known lithium resources. Thus supporting regional growth in the coming years.

Middle East & Africa

The Middle East & Africa is expected to have significant market growth driven by GCC countries due to increased investment in green energy and tourism. There are many initiatives to produce batteries in the Gulf Cooperation Council (GCC) region. For instance, Statevolt, a California-based battery producer, plans to build a gigafactory in Ras Al Khaimah, UAE, to manufacture solid-state battery cells by 2026. Similarly, Saudi Arabia and the UAE are investing in lithium processing facilities to secure a stable supply of lithium for local battery production. Such parameters will support the regional market growth in the foreseen period.

COMPETITIVE LANDSCAPE

KEY INDUSTRY PLAYERS

Market Players are Adopting Product Innovation Strategies to Attract New Customers

SQM, Albermale Corporation, Tianqi Lithium Corporation, and Arcadium Lithium Co, Ltd. are identified as key manufacturers in the global lithium market study. Players operating in the market have adopted both organic and inorganic expansion strategies to capitalize on the growing market potential. The global lithium market is consolidated, with leading players commanding significant shares. Major companies such as Albermale, SQM, and Tianqi Lithium are driving market growth by investing in capacity expansions and innovative production technologies. Increasing production and other sustainable efforts taken by market players will increase the product’s demand during the forecast period.

LIST OF KEY PLAYERS PROFILED

• Albemarle Corporation (U.S.)


• SQM S.A. (Chile)


• Tianqi Lithium (China)


• International Lithium Corp. (Canada)


• LSC Lithium Corporation (Argentina)


• FMC Corporation (U.S.)


• American Lithium Corp. (U.S.)


• Livent (U.S.)


• Avalon Advanced Materials (Canada)


• Sayona Mining Limited (Australia)

KEY INDUSTRY DEVELOPMENTS

• August 2024: Arcadium Lithium acquired Li-Metal’s lithium metal business for USD 11 million to enhance production capabilities and sustainability. This acquisition includes intellectual property and facilities, supporting demand for advanced battery materials and enabling innovative lithium metal production methods.


• January 2023: Ganfeng Lithium Co., Ltd. announced an investment of USD 2.14 billion in two new battery factories to increase its production capacities by 34 GWh. This facility will add to manufacturing, which is expected to grow to around 100 GWh annually.


• December 2022: Sigma Lithium announced that the company secured a fund of USD 100 million from Synergy Capital to build the first phase of a USD 155 million expansion at its Grota do Cirilo lithium project in Minas Gerais, Brazil. This mine can generate up to 270,000 tonnes per year of high-purity battery-grade lithium concentrate, equal to about 36,700 tonnes of Lithium Carbonate Equivalent (LCE).


• September 2022: SQM S.A. announced a sustainable innovation program named the 'Salar Futuro Project,' which develops a new form of lithium production with zero freshwater usage. This project's initial investment of USD 1,500 million aims to achieve a zero water footprint by achieving carbon neutrality.


• June 2022: Albemarle Corporation inaugurated a third chemical conversion plant La Negra III/IV, in Antofagasta. This facility is one of the modern conversion plants in Latin America. This facility will double the lithium production, reduce water consumption by 30% per metric ton, and commit to a sustainable production line.

REPORT COVERAGE

The research report provides a detailed market analysis, focusing on crucial aspects such as leading companies, products, applications, and end users. In addition, it provides quantitative data regarding market size, analysis, research methodology, and insights into market trends. It also highlights vital industry developments and the competitive landscape. In addition to the above-mentioned factors, it encompasses various factors that have contributed to the market's growth in recent years.

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Report Scope & Segmentation