Global lithium demand could exceed 13 million tons by 2050 under an accelerated energy transition. This number is more than twice the base-case projections that consultancy Wood Mackenzie has warned about. Without significant investments, the supply deficits could emerge as early as 2028.
The firm said even existing committed projects are unlikely to keep the market balanced beyond the mid-2030s.
In the Energy Transition Outlook for Lithium report released Tuesday, Wood Mackenzie models four energy transition pathways. Demand in 2050 ranges from 5.6 million tons of lithium carbonate equivalent under a delayed transition to 13.2 million tons under a net-zero pathway.
Four Deficit Scenarios
Under the country-pledges scenario, the market would require an additional 6.7 million tons of supply by mid-century to meet projected consumption. The net-zero case would require roughly 8.5 million tons more. Even in the base case, which reflects current market trends and policy momentum, supply struggles to keep pace beyond the mid-2030s. Thus, structural shortages could hit just as electrification accelerates across transport and power systems.
The delayed transition scenario assumes a more gradual clean technology uptake, with slower emissions cuts and weaker climate policies. Under that premise, the market would be adequately supplied for 10 more years, tipping into deficit in 2037.
The base scenario reflects existing policies and expected technology deployment, producing tighter balances in the 2030s. The country-pledges scenario aligns with commitments under the Paris Agreement. It assumes governments fully implement their stated targets, creating deficits around 2029.
Meanwhile, the most aggressive pathway, net zero, aligns with limiting global warming through rapid decarbonization of energy, transport, and industry, with deficits emerging from 2028 and persisting through mid-century.
Vehicle Driving Demand
"EVs remain the primary driver of lithium demand growth, but energy storage systems are the sleeper story," said senior research analyst Rebecca Grant.
Across the abovementioned scenarios, EVs account for between 72% and 80% of total lithium consumption.
The total investments per scenario are as follows:
- $104 billion under a delayed transition
- $114 billion in the base case
- $236 billion under country pledges
- 276 billion in a net-zero world
"This is a $100–$275 billion investment story depending on how the energy transition unfolds," Grant said, clarifying that capital must be deployed efficiently despite trade fragmentation and shifting regional supply chains.
Lithium remains irreplaceable because of its unique electrochemical properties: it is the lightest metal, has a high energy density, and enables rechargeable batteries with long cycle life, making it central to EVs and stationary storage.
Top producer SQM (NYSE:SQM) is positioning for tighter markets. The Chilean miner expects global lithium demand to grow about 25% this year and sees a significantly stronger price environment in the near term as oversupply fades. Through its joint venture with Codelco at the Atacama complex, SQM is targeting roughly 30% growth in production over the coming years.
Price Watch: Global X Lithium & Battery Tech ETF (NYSE:LIT) is up 6.16% year-to-date.
Photo by Juan Roballo via Shutterstock
