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Study: Lithium supply may far exceed demand from U.S. light-duty BEVs through 2032

March 05, 2024

The International Council on Clean Transportation (ICCT), an independent research organization, has released a study exploring the potential for the United States to secure a reliable supply of lithium to meet the growing demand for battery electric vehicles (BEVs).

The study highlights the need for a sufficient and affordable supply of batteries and battery materials to manufacture and sell BEVs at prices comparable to combustion engine vehicles. The ICCT’s analysis indicates that the U.S. is well-positioned to meet the challenges of scaling and securing lithium supply for electric vehicles over the next decade.

The report estimates that by 2032, annual lithium demand from increased U.S. light-duty BEV sales could increase to around 340 thousand metric tons per annum (ktpa) of lithium carbonate equivalent (LCE). This projection is based on potential BEV market growth estimates from EPA’s proposed Multi-Pollutant Emissions Standards, suggesting that BEVs sales shares could increase to 67% of new U.S. light-duty vehicle sales by 2032. The ICCT identifies three potential scopes for lithium supply, concluding that new lithium supply may far exceed lithium demand from new U.S. light-duty BEVs through 2032.

The study also provides a detailed assessment of new projects within the United States and in countries with which the U.S. has existing or potential future Free Trade Agreements (FTA) or Critical Mineral Agreements (CMA). It finds that many new lithium mining and refining projects are in operation or planned in the United States and its FTA and CMA partners as of 2023. These projects could lead to about 1,200 to about 2,050 ktpa of lithium supply by 2032, or about 3.5 – 6 times higher than the projected lithium needed for new U.S. light-duty BEVs.

The study also generates hypothetical price scenarios of three key battery materials (lithium, cobalt, and nickel), from 2023 to 2032, and develops a bottom-up battery cost analysis to identify the impact of changing raw material prices on battery pack-level costs. It applies these battery cost estimates to assess the impact on new BEV prices through 2032. The study finds that battery pack and BEV costs are linked to raw material prices, but substantial continued battery and BEV cost reductions are expected under most raw material price scenarios. The IRA incentives in the United States for battery production and BEV purchases are projected to accelerate the timing for purchase price parity by about three years.

Download the study here: