The global lithium market is worth USD 8.26 billion in 2022 and is anticipated to reach 27.34 billion by 2028 with a CAGR of 13.9% in the forecast period 2023-2028.
Market Overview:
Lithium is a chemical element that is highly reactive and flammable. Lithium is present in trace amounts in the biological system. The lithium-based drugs are helpful as antidepressants in the treatment of bipolar disorder. These drugs are also used as mood stabilizers. Lithium has various industrial applications, such as in producing heat-resistant glass and ceramics, grease lubricants, lithium metal batteries, and majorly used lithium-ion batteries. Lithium is a flux additive to produce iron, steel, and aluminium.
Market Drivers:
The worldwide adoption of lithium-ion batteries in electronics and energy storage systems is driving the growth of the lithium market.
Lithium-ion batteries have a wide range of applications as they are in high demand in electronics, transportation, and energy storage systems. Lithium-ion batteries are included in smartphones, tablets and laptops, buses, power tools, and portable and stationary energy storage, which is boosting the growth of the global lithium market value. The rising investments in electronic vehicle manufacturing across the world are expected to enhance the lithium market growth over the forecast period. Lithium-ion batteries are in high demand for electronic vehicles due to increasing sales. According to the International Energy Agency (IEA), the number of electric car sales worldwide was around 10 million in 2022 and is expected to grow by 35% yearly. According to some research, the demand for lithium in the manufacturing of electric vehicle batteries is expected to increase by 200% over 2025. The rising electric vehicle industry also influences the growth of the lithium market, as lithium is an essential component of batteries. Growing demand for battery-operated material handling equipment in industries across the world is propelling the growth of the global lithium market. The equipment in the industries is being technologically developed, which requires lithium-ion batteries to increase the lithium market value across the world.
The growing applications of lithium in various industries are boosting the growth of the lithium market size across the world. Lithium is being widely adopted in the pharmaceutical industry for treating the mental illness of people as it is used as an antidepressant, which is augmenting the market growth. Lithium grease is increasing lithium adoption by raising the global market revenue.
Market Restraints:
The extraction of lithium had a high impact on the society and environment as it mainly causes water depletion and pollution, restraining the market growth of lithium. Lithium extraction requires metals and toxic chemicals, and the emission of these toxic chemicals through the air spills the ecosystem, leaching communities. Metal extraction majorly damages the soil and causes air pollution, hampering the growth of the global lithium market. In many regions, locals have complained about the contamination of the water streams used by humans and livestock, which is expected to impede the growth of lithium adoption across the globe.
Another factor hindering the lithium market expansion is the concern regarding recycling. High cost of recycling and difficulty in the recycling process as the material is highly reactive, flammable, and toxic, which leads to the absence of a lithium recycling process.
Market Opportunities:
The falling costs of energy storage systems and the rising efficiency of lithium-ion batteries are making energy storage systems economically stable for industries and households, which is expected to provide opportunities for the expansion of the global lithium market. The growing adoption of lithium in the batteries of energy storage systems due to its high efficiency, density, and long lifespan is expected to drive the lithium market rapidly over the forecast period. The rising investments in research and development activities for improving battery performance are increasing the market growth opportunities over the forecast period.
Market Challenges:
The side effects associated with the long-term use of lithium, such as shaking hands, increased amount of urination, tiredness, and thirst, are expected to impede the market expansion in the pharmaceutical industry. The complexity of the recycling process and the environmental effects of lithium are challenging for the growth of the lithium market. The complex nature of lithium, such as its high reactivity, flammability, and toxic nature, makes it challenging for manufacturers to mold lithium in production.
Market Recent Developments:
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REPORT METRIC |
DETAILS |
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Market Size Available |
2022 – 2028 |
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Base Year |
2022 |
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Forecast Period |
2023 - 2028 |
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CAGR |
13.9% |
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Segments Covered |
By Type, Product, Application End-Use, and Region. |
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Various Analyses Covered |
Global, Regional and Country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview of Investment Opportunities |
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Regions Covered |
North America, Europe, APAC, Latin America, Middle East & Africa |
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Market Leaders Profiled |
Albemarle Corporation, Ganfeng Lithium Co., Ltd., SQM S.A., Tianqi Lithium Corporation, Livent Corporation, Lithium Americas Corporation, Pilbara Minerals, Orocobre Limited Pty. Ltd., Avalon Advanced Materials, Ganfeng Lithium Co., Ltd., and Others. |
Market Segmentation
The metal segment held the largest share in the global lithium market revenue as the metal form is used in producing lithium-ion and metal batteries. Lithium batteries in metallic form as an anode are used and are disposable. These have a longer shelf life and higher charge density than standard batteries. These metal batteries are in high use in pacemakers and electronic medical devices, which is raising the demand for lithium by increasing the market revenue.
The compound segment has been gaining traction in recent years as the lithium compound is used in manufacturing antidepressant drugs in pharmaceuticals, which is expected to increase the market revenue over the forecast period.
The carbonate segment dominated the global lithium market, with the largest share of 53.2% in 2022. Lithium carbonate is an inorganic form of the compound which is used in the production of lithium hydroxide and pure metal. Carbonate form is used in pharmaceuticals for treating bipolar disorder and in batteries. Lithium carbonate is used as an adhesive and waterproofing slurry.
The hydroxide segment is gaining traction and is anticipated to have significant growth in the lithium market revenue over the forecast period. Lithium hydroxide is most used in the manufacture of batteries. It is used in the manufacturing of spacecraft and submarines, boosting the lithium hydroxide market value. The rapid development in the technologies used in the batteries is expected to increase the demand for lithium hydroxide, which will drive the market growth over the forecast period.
The battery segment witnessed the most significant global lithium market revenue share in 2022. Lithium batteries are mainly available in two forms: disposable and rechargeable. The rechargeable batteries include lithium-ion and lithium-ion polymer batteries, which are highly used in producing electric vehicle batteries. Lithium-ion batteries are employed in various applications, such as consumer electronics and telecommunication devices. Lithium batteries are gaining colossal popularity compared to standard batteries due to their lifespan and capacity. All these factors are propelling the market growth in the batteries segment by raising the global market revenue.
The automobile segment accounted for the greatest share of the lithium market revenue in 2022. The automobile industry was moving towards alternative energy sources, such as lithium-ion battery technology. The rising demand for electric vehicles and the shift towards eco-friendly vehicles are driving the market growth. The rising government initiatives for influencing people to move towards electric vehicles propel the automobile segment in the growth of the global lithium market.
The consumer electronics segment is growing exponentially, where most gadgets are incorporated with rechargeable batteries, which is expected to boost market expansion. The growing advancements in battery technologies are increasing the demand for electronic products as the lifespan of batteries is helping in the market growth.
Market Regional Analysis:
The Asia Pacific region dominated the global market revenue with a significant share of 57% in 2022 due to rapidly developing automobile, glass, and consumer electronic industries in countries such as China, Japan, South Korea, and India. The Asia Pacific region is expected to maintain its dominance in the forecast period due to the growing investments in advancing the battery technology sector. China is the largest shareholder in the automobile industry across the world. According to the China Passenger Car Association, the country sold over 3.3 million units in 2021, indicating a huge increase compared to the previous year. China is the global largest electric vehicle producer, dominating the lithium-ion battery supply. The rising government initiatives for reducing pollution and enhancing the green environment are influencing people to choose battery-based products and vehicles, which is estimated to increase the lithium market revenue.
The North American region is estimated to have steady, significant growth in the lithium market over the forecast period—the growing adoption of energy resources due to stringent government regulatory standards. The U.S. holds a significant share in battery production after China, making the North American region crucial for the lithium market expansion. The presence of key market players is propelling the growth of the lithium market size.
Market Key Players:
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