Lithium Market Size, Share & COVID-19 Impact Analysis, By Product (Carbonate, Hydroxide, Others), By Application (Batteries, Glass & Ceramics, Lubricant, Medical, Polymers, Metallurgy, Others), and Geography Forecast, 2020-2027

The global lithium market size was USD 4.09 billion in 2019 and is projected to reach USD 8.24 billion by 2027, exhibiting a CAGR of 9.2% during the forecast period.

Lithium is a soft, silvery-white alkali metal that is highly flammable and reactive and needs to be stored with mineral oil. It is used in rechargeable batteries for laptops, mobile phones, electric vehicles, and digital cameras. Rapid advancements in rechargeable batteries, driven by the growth in the Li-ion battery market globally, are expected to fuel the product adoption globally. The growing demand for batteries, lubricants, glass & ceramics, foundry, and others is expected to foster market growth.

The increasing adoption of hybrid and electric vehicles, high drain portable electronics, and energy storage systems has had a huge impact on the growth of the overall market. The increasing adoption of electric vehicles is attributable to the rising concerns over environmental pollution, as EVs drastically reduce carbon emissions. Governments in several countries across the world are implementing strict emission standards to reduce and control carbon emissions. This is expected to augment the market growth in the forthcoming years. For instance, according to The Paris Agreement in April 2016, it aims to reduce greenhouse gas (GHG) emission by at least 40% up to 2030, under its 2030 climate and energy framework.

Disruption in Transportation Activities amid COVID-19 to Lead to Low Battery Demand

The Covid-19 pandemic has rattled the global industrial production by disrupting the raw materials as well as intermediates of the supply chain. The pandemic has had a drastic impact on the manufacturing sector globally. Companies are remodeling their lithium supply chains, especially industries that are dependent on import business.

Li-ion battery (LIB) is likely to play a major role in the highly electrified transport sector. The coronavirus outbreak has hindered the battery and electric vehicle (EV) markets. The International Energy Agency (IEA) projected that the pandemic is likely to cause a 15% contraction in 2020, affecting the passenger car market and EV market. However, Li batteries are used in medical devices, including ventilators during the global pandemic. In July 2020, Pure EV, an electric vehicle manufacturing company, announced that it will supply Li batteries to the healthcare companies that are engaged in the fight against the novel coronavirus across India. This is expected to aid the key market growth in the forthcoming years.

LATEST TRENDS

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Companies Creating Environmentally Sustainable Solutions for Lithium-Ion Batteries (LIB) and Electric Vehicles (EVs)

Li is a crucial component to clean up the environment by aiding in reducing emissions and is being adopted by several big automotive companies. For instance, the battery of a Tesla Model S consists of 12 kilograms of Li in it. Recently, IBM has developed a new battery type that is free of nickel, cobalt, and other heavy metals, thus, avoiding the humanitarian and environmental issues related to the adoption of metals in batteries. The battery is made from seawater, and the researchers at IBM claimed that this concept could help eliminate the need for heavy metals in the production of batteries.

Electric vehicle companies and carmakers are constantly changing their preferences, depending on the cathode characteristics in terms of safety, stability, life, cost, and energy density. EVs are promoted as a sustainable transportation choice on account of a life-cycle basis, as they emit fewer GHG than conventional vehicles. For instance, Tesla is planning for next-generation EV batteries that would focus on introducing Li-ion phosphate batteries to market. This will cut the vehicle costs, extend the vehicle range up to 400 miles or more, and enable the batteries to last as long as 1 million miles. Additionally, the company is planning to implement a high speed and heavily automated battery manufacturing process that is designed to increase mass production and reduce labor costs.

DRIVING FACTORS

Increasing Adoption of Electric Vehicle Will Aid Market Growth  

The evolution of the automotive industry over the past few years, coupled with technological advances will have a massive impact on the adoption of EVs. They are designed to replace conventional traveling ways owing to the advancement in technology, low carbon emission, low maintenance, smoother drive, the convenience of charging at home, reduced engine sound, and high fuel economy. EVs help in reducing air pollution in densely populated areas and GHG emissions.

The rise in demand for high performance, low emission, and fuel-efficient vehicles, coupled with strict government norms towards vehicle emission, is expected to boost the demand for electric vehicles. According to the International Energy Agency (IEA), the volume of sales of electric cars was around 2.1 million worldwide in 2019. Electric cars accounted for 2.6% of the global car sales and around 1% of the global car stock in 2019, registering a 40% Y-o-Y increase. With rapid technological advances in the electrification of trucks, buses, and two or three-wheelers increases, the demand for electric vehicles is escalating significantly.

Batteries are crucial for hybrid electric vehicles (HEVs), all-electric vehicles (EVs), and plug-in hybrid electric vehicles (PHEVs). EVs using Li batteries could considerably reduce the emissions associated with road vehicle transport. Most of the manufacturers are integrating LIB in electric vehicles. For example, Groupe Renault’s ZOE car is Europe's best-selling electric car. The Renault Zoe is made in two variants, namely R110 and R135, having 400V, 52 kWh Li-ion battery pack that weighs around 326 kilograms. Also, the company plans to bring electric cars into the Indian market by 2022. The company’s Kwid electric version is presently a success in China and further plans to introduce it in India.

RESTRAINING FACTORS

Environmental Concern and Product Recycling Factor to Hinder Market Growth

Li extraction has a significant social and environmental impact due to water depletion and pollution. Also, to process Li, toxic chemicals are required. The release of toxic chemicals through air emission, leaching, or spills can harm the ecosystem, food production, and communities. The extraction of lithium inevitably damages the soil and causes air pollution. In Argentina, locals claim that the operations have contaminated the streams used by livestock and humans.

There is a major concern regarding product recycling. A low collection rate, volatility in lithium price, and high recycling cost has contributed to the absence of Li recycling. The probable scope for product recycling is complicated as the material is highly reactive, flammable, and toxic.

SEGMENTATION

By Product Analysis

Carbonate Segment to Hold a Dominant Share in Global Market

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

Lithium carbonate (Li2CO3) held a dominant lithium market share in 2019. It is also known as Li salt that is preferably used for processing metal oxides. Carbonate is extracted from brines and the first compound in the production chain. It is used in the pharmaceutical industry to manufacture medicines used for treating patients with bipolar disorder and prevent cluster headaches. Additionally, Li2CO3 is extensively used in the automotive industry on account of the increasing sale of electric vehicles.  

Advancement in batteries has created a huge demand for lithium hydroxide, which is expected to experience the highest CAGR during the forecast period. It is manufactured from varied sources such as petroleum, hard rocks, and brines.

Several manufacturers across the world are constructing plants to expand the overall business and secure a place in the value chain. For example, in March 2019, Albemarle started construction work of the Li-hydroxide (LiOH) processing plant in Kemerton, Western Australia, for USD 709.4 million. Once the plant is operational, it will produce up to 100,000 tons per annum of premium battery-grade LiOH. Additionally, it is extensively used in the production of Li-ion batteries, energy storage systems, and electric vehicles. In 2019, China produced around 79% of Li-hydroxide that are used in electric car batteries. Due to the global pandemic, most of the western carmakers will localize the supplies of Li for electric car batteries.

By Application Analysis

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Batteries to Hold a Major Share in the Market

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

The batteries segment accounted for the major market share in 2019 and is likely to continue its dominance during the forecast period. Li batteries 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, electronics games, watches, computers, and other devices. On the other hand, secondary batteries are used in portable computers, telephones, tablets, electric vehicles, cordless tools, and video cameras. The surging sales of electric vehicles owing to the rise in per capita disposable income and user preferences are anticipated to boost the demand for Lithium-batteries.

Li₂CO₃ is used to lower the temperature and thermal expansion in glass and ceramics applications. It is used in glass-ceramic cooktops as it reduces thermal expansion, ensures color consistency, increases mold strength, improves durability, lowers viscosity, and increases melt rate. SCHOTT AG, a leading company that specializes in manufacturing glass and glass-ceramics, adopts lithium aluminum silicate systems in the production of glass-ceramics. This includes CERAN cooktop panels, ZERODUR glass-ceramic fire protection glasses and security, and ROBAX fire viewing windows for fireplaces.

Li greases are semisolid lubricants that are thicker than oil and are applied to moving components. They extend equipment life by reducing the wear and tear that occurs when metal rubs against metal. Lubricating greases consist of thickener, additives, and base oil. They are used for moderate-temperature and medium-speed applications on machine parts, ball bearings, conveyors, automobile components such as gears, chassis, and wheel bearings, and other moving parts.

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REGIONAL INSIGHTS

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The market in North America is likely to rise at a considerable pace 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 growing adoption of solar panels has created a substantial demand for cells and batteries to store the energy.

Li batteries are used in the aerospace sector to electrify aircraft, helicopters, and satellites. The increasing adoption of Li-ion batteries in space applications is likely to increase product demand. For instance, in a technology transfer program of NASA, the gas-powered engines of aircraft were replaced by LIB packs designed by NASA and other contractor partnerships. These factors will contribute to the growth of the market in North America.

Asia Pacific is estimated to hold the maximum share in the global market owing to widespread usage in the industrial and commercial sectors including, power, electronics, chemical, industrial, general manufacturing, and others. The region is a rapidly developing region attributed to the various government initiatives and increasing foreign investments in the industrial sector. According to research, China has the largest reserves of Li in the world. The easy availability of raw materials is considered to be one of the factors supporting the rapid growth of the market.

The presence of a large number of Li and its derivatives producing companies in emerging countries like India, Taiwan, Japan, South Korea, and China are driving the product demand. China is one of the largest producers of electronic components that consist of fuel cells, batteries, and capacitors. There has been advancement in the fuel cell technologies for electric vehicles to aid the rules set by the government to reduce the pollution that occurs due to the burning of petrochemicals and gasoline. The increasing consumer awareness about the environmental benefits of clean energy sources is shifting the preference from conventional transport vehicles to electric vehicles. The need for cleaner energy sources has substantially increased the demand for Li batteries and solar cells. The adoption of these clean energy resources by the industrial as well as domestic sectors is boosting the regional market.

The market in Europe has been experiencing significant industrial developments in the last decade. The increasing investment by the European Union for R&D in automobile, ICT, and healthcare sectors is the main factor driving the growth. According to the European Automobile Manufacturers Association (ACEA), Europe manufactured about 20% of the total motor vehicles in 2019, of which 3% of the market was shared by electric vehicles.

South America accounts for around 70% of the world’s lithium reserves, where the metal used in the rechargeable batteries is for EVs and mobile phones. Chile produces Li that is generally affordable and of high quality. The Chilean government is allowing new entrants as the market is consolidated in nature in the region. The lithium producer gaining much more traction in this region.

KEY INDUSTRY PLAYERS

Acquisition, Partnerships, and Capacity Expansion are the Key Strategic Initiatives Adopted by the Companies

Major players operating in the lithium industry are Albemarle, SQM S.A., FMC Corporation, Avalon Advanced Materials, and others. Companies are involved in capacity expansion, new product launch, joint venture, acquisition, and partnership to gain a competitive edge in the market. For example, in October 2019, Albemarle Corporation completed its USD 1.3 billion joint venture with Mineral Resources Limited. Albemarle will market 100% of its output from the Kemerton LiOH and Wodgina mine conversion trains. The 50-kiloton per annum hydroxide conversion capacity at Kemerton is at present scheduled to be commissioned in stages starting in the first half of 2021.

In March 2019, SQM, a Chile-based Li miner company to expand its Li₂CO₃ production plant. The USD 400 million worth plant will be able to produce 180,000 tons of carbonate a year in Chile.

Manufacturers are focusing on R&D trends to deliver high performance, production, and development of batteries. In July 2020, the U.S. Department of Energy’s (DOE) Argonne National Laboratory collaborated with the Hong Kong University of Science and Technology (HKUST), developed a new particle-level cathode coating for LIBs to increase their safety and life. Also, researchers at DOE have launched a lithium-ion battery recycling center, ReCell Center, at Argonne National Laboratory. These recycled materials can be used in new batteries, thus, reducing the production costs by 10% to 30%, thereby lowering the overall EV batteries cost.

XNRGI is a company that deals with next-generation energy storage for Li batteries. The company generally provides grid-scale energy storage solutions and recently introduced a porous silicon XNRGI storage technology for the rechargeable battery.

In addition to this, battery developers are using a silicon battery that boosts up the battery capacity by up to 70%. So, batteries with silicon anodes are expanding the market for electronics and wearable devices. For example, Enevate is using an engineered porous film made mainly of pure silicon. 

LIST OF KEY COMPANIES PROFILED:

• FMC Corporation (India)


• Albemarle Corporation (U.S.)


• SQM S.A. (Chile)


• Tianqi Lithium (Australia)


• American Lithium Corp. (Canada)


• Livent (U.S.)


• Avalon Advanced Materials (Canada)


• Sayona Mining Limited (Australia)


• Other Key Players

KEY INDUSTRY DEVELOPMENTS:

• July 2020 – Khanij Bidesh India (KABIL) signed an agreement with Jujuy Energía y Minería Sociedad del Estado (JEMSE), an Argentina based mining company for the production and exploration of Li.


• June 2020 – GBRacing launched its new zero-e sustainability truck with MG Li-Ion Batteries. The trucks will run entirely on MG LIB and solar power technology. The combination of these two will provide enough energy to shower, cook, power phones and laptops, and other electricity needs for at least four days.


• January 2020 – Kyocera, a Japanese electronics company, to launch the world’s first SemiSolid LIB. The company offers a new cell architecture developed by battery start-up 24M in the U.S., which will considerably improve battery economics. The product will be available in 5 kWh, 10 kWh, and 15 kWh models and these devices will feature semi-solid Li-ion battery architecture.

REPORT COVERAGE

An Infographic Representation of Lithium Market

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The lithium market report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, applications, and products. Also, the report offers insights into lithium market trends and highlights vital industry developments. In addition to those mentioned above, the report encompasses various factors that have contributed to the growth of the market over recent years.

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