Will lithium demand outstrip supply?
Demand for lithium will grow dramatically, but the question is whether supply can keep up. A 2023 study found that by 2040, global lithium demand for electric vehicle batteries could exceed current production levels by up to 8 times, depending on how fast EV adoption grows and which battery chemistries dominate [4]. For context, that means we would need to mine roughly eight times more lithium each year than we do today just to meet EV battery needs. A 2025 study focused on China projects that lithium demand for EVs there alone will reach 340,000–450,000 tonnes by 2035, which is 6–8 times higher than in 2022 [3]. These numbers make clear that supply must scale enormously.
Recycling can significantly close the gap. The same 2023 study found that by 2040, recycled lithium could meet more than half of the raw material demand for new EV batteries [4]. A 2021 analysis projects that under ideal conditions, retired batteries could supply 53% of global lithium demand by 2040 [2]. In China specifically, recovered lithium could account for 30–31% of total EV lithium demand by 2035 [3]. So while mining must expand, recycling will become a major secondary source, reducing pressure on primary extraction.
Does battery chemistry affect lithium supply risk?
Yes, the type of battery chemistry used in EVs dramatically changes how much lithium is needed and how vulnerable the supply chain is. The two dominant chemistries today are NMC (nickel manganese cobalt) and LFP (lithium iron phosphate). LFP batteries use less lithium per unit of energy storage and avoid cobalt and nickel entirely, which are also subject to supply disruptions [1]. A 2024 study found that if the market shifts toward LFP, the demand for cobalt, nickel, and manganese drops so much that those materials could reach full circularity (100% recycled supply) before 2040 [2]. This means that choosing LFP can reduce overall mineral supply risk.
However, LFP does not eliminate lithium vulnerability. The same 2024 study showed that for both NMC and LFP chemistries, over 80% of the supply chain passes through China for processing, creating a single-point-of-failure risk [1]. For NMC, 80% of cathodes include minerals processed in China; for LFP, it's 92% [1]. So while chemistry choices can reduce the number of critical minerals, they do not solve geopolitical concentration risks. Diversifying processing capacity across multiple countries is essential.
What are the biggest obstacles to lithium supply?
The main obstacles are not geological scarcity but rather the speed of scaling mining, building recycling infrastructure, and reducing dependence on a single country for processing. A 2024 study found that the combined vulnerability across multiple supply chain stages (mining, processing, cell manufacturing) is substantially larger than any single step alone [1]. For example, even if lithium is mined in Australia or Chile, it is often shipped to China for refining into battery-grade material, creating a bottleneck. The study warns that reducing risk requires addressing vulnerabilities across the entire battery supply chain, not just at the mining stage [1].
Recycling infrastructure is also underdeveloped in most regions. A 2021 analysis emphasized that for each region to benefit from recovered materials, recycling and manufacturing facilities must be built locally [2]. Without that, even if batteries are retired, the lithium may not be recovered efficiently. Additionally, a 2022 review notes that some countries like India are exploring sodium-ion batteries as an alternative to lithium, precisely because lithium resources are not abundant everywhere and prices can be volatile [5]. This highlights that while lithium is sufficient globally, local access and processing capacity remain real hurdles.
Sources used in this answer
Electric vehicle battery chemistry affects supply chain disruption vulnerabilities
Over 80% of NMC and 92% of LFP battery supply chains pass through China, creating concentrated vulnerability that is larger when considering multiple stages together.
Circularity of Lithium-Ion Battery Materials in Electric Vehicles
Under ideal recycling conditions, retired batteries could supply 53% of global lithium demand by 2040, and a shift to LFP could make cobalt, nickel, and manganese fully circular before 2040.
Analysis of lithium demand for electric vehicles from supply and demand perspectives under China's carbon peak and neutrality goals.
China's lithium demand for EVs could reach 340,000–450,000 tonnes by 2035 (6–8 times 2022 levels), with recycling potentially covering 30–31% of that demand.
A forecast on future raw material demand and recycling potential of lithium-ion batteries in electric vehicles
By 2040, global lithium demand for EV batteries could exceed current production by up to 8 times, but recycling could supply more than half of that demand.
Na ion batteries: An India centric review
Lithium availability and price are serious concerns, prompting research into sodium-ion batteries as a more abundant and cheaper alternative for some regions.