With Global Demand For Lithium Batteries Expected To Grow Five-Fold By 2030, Is There A Supply Chain Crisis Brewing?

A report published in February by the public-private alliance Li-Bridge shared that the global demand for lithium-ion batteries is expected to grow more than five-fold by 2030. In dollar terms, the lithium battery market is expected to increase by $55 billion per year through the end of the decade. This demand is being driven primarily by demand from the automotive and consumer electronics industries as these batteries see more and more applications emerge.

Lithium-ion batteries are highly relevant for tons of electronic devices. They are both lightweight and have good rechargeability rates, making them the go-to battery for anything from vaping devices to cellphones, E-bikes, toothbrushes, solar backup storage, and more. However, the vast majority of the growing demand is coming from an expanded interest in electric vehicles (EVs) and energy storage systems.

In addition to increasing consumer demand, governmental net-zero targets are contributing to a regulatory shift propping up EVs. For example, India’s Faster Adoption and Manufacture of Hybrid and Electric Vehicles Scheme and the EU’s planned complete ban on internal combustion engine (ICE) vehicles by 2035 are contributing to the demand for EVs and thus, lithium-ion batteries.

In 2021, there were a total of 16.5 million EVs on the road globally. The global EV market is expected to expand to more than 350 million vehicles by 2030. However, this projection is highly dependent on battery manufacturing and the supply chain of lithium-ion batteries. Between finite mineral supplies and already vulnerable supply chains, the industry is at risk of supply bottlenecks and high prices. 

Supply Chain Risks – Growing Demand, Shrinking Supply

The majority of Lithium today is mined from what is globally known as the “Lithium Triangle”, a junction of Argentina, Chile, and Bolivia. The Lithium Triangle makes up more than 58% of the world’s supply. Carmakers are expected to remain dependent on imports to keep up with the demand for EVs. This presents a threat to national and economic security for any country that is heavily reliant on the international supply of lithium or other raw materials to create the batteries needed for carmakers. 

A recent report by McKinsey predicts that at least 120 to 150 new battery factories will need to be built between now and 2030 globally to help meet the expected demand. Furthermore, the report puts an emphasis on upcycled and recycled batteries to help meet demand due to finite mining resources. 

Recycling end-of-life batteries or production scrap is an innovative solution to the seemingly inevitable supply chain crisis that is brewing. However, with lithium-ion battery chemistries constantly changing, it has been difficult for recyclers to find success in commercializing their process to appeal to car manufacturers. Few recyclers have seen success. 

RecycLiCo’s Leach Technology Is Helping To Localize The Lithium-Ion Battery Supply Chain 

RecycLiCo Battery Materials Inc. AMYZF  is one of the companies pioneering recycling-upcycling technology. RecycLiCo is a battery materials company focused on recycling and upcycling lithium-ion batteries. It has created a patented, closed-loop hydrometallurgical process that has a lower environmental impact compared to competitors that have complex processing and purification steps that result in extensive liquid and waste production.

RecycLiCo’s leaching technology has achieved up to 100% extraction of lithium, nickel, manganese, and cobalt from lithium-ion production scrap. Production scrap is the primary source of recyclable materials and it is projected that battery scrap will account for 78% of recyclable materials in 2025.  

As RecycLiCo’s technology evolves, the company will be able to commercialize this process and increase the number of recycled lithium-ion batteries on the market. The company is working to make this a reality and recently signed an agreement with Sonid Inc, a Korean electronics manufacturer. 

The agreement represents steps toward a potential commercial joint venture or technology licensing agreement. Both companies are hoping to join forces to establish a lithium-ion battery recycling facility to advance RecycLiCo’s patented technology. This venture will allow Korean carmakers to localize the lithium-ion battery supply chain instead of relying on international raw materials. 

It’s clear that climate-conscious consumers and governments with environmental agendas are changing the automobile landscape. Countries like China are expected to see up to 40% of all vehicles be electric by 2030. In order for the EV industry to continue to flourish, car manufacturers cannot rely solely on raw materials to create lithium-ion batteries. Companies like RecycLiCo are storming the scene and providing a strong case for the efficacy of recycled batteries. 

Featured Photo by dcbel on Unsplash

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

Posted In: CommoditiesMovers & ShakersMarketsGeneralPartner ContentRecyclico Battery Materials
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