India’s electric vehicle ambitions could stumble on lack of Lithium - India Renewable Energy Consulting – Solar, Biomass, Wind, Cleantech
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Net Zero by Narsi is a series of brief posts by Narasimhan Santhanam (Narsi), on decarbonization and climate solutions.
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Could India face a scarcity of Lithium in future on its road to electrifying its transport?

This topic has been discussed so many times (including in a recent news item) at so many forums in India that a reader would assume that the shortage (or imminent shortage) of Lithum is a given for India’s electric vehicle sector.

It actually might not be, not at least in the short and medium term.

Let’s first look at the overall Lithium production and demand scenario worldwide and how these are expected to stack up next 10 years.

Total Li produced in the world in 2020 will be about 65000 tons, and by 2025 it could be double that, at about 130,000 tons. If some of the more aggressive estimates for electric vehicle growth come to pass, this could even be 150,000 tons by 2025.

The global lithium market is expected to grow in future due to decreasing lithium-ion battery costs, growth in energy storage system, growth in electric vehicles market and favorable lithium pricing. Key trends in this market include government support, new lithium projects and technological advancements in lithium-ion batteries.

The global demand for Li is expected to show an excellent growth of over 15% CAGR until 2025, and possibly beyond

A large part of this high CAGR comes from the acceleration in electric vehicles use worldwide, with the share of this sector expected to grow from its 15% in 2015 and about 35% in 2018 to over 60% of total global Li consumption by 2025

While the Business as Usual scenario for Lithium growth estimates its demand at about 130 KT by 2025, significant acceleration in EV adoption could result in a demand that is almost 30% higher than this by 2025. Compare these to production estimates provided earlier.

On the supply side, with major Lithium miners ramping up their activities, business as usual scenarios in fact predict an oversupply by 2018; all the same, delays can be expected in such ramp-ups, and conservative supply estimates could convert this oversupply to an excess demand of almost 25% over supply by 2025.

Overall, it would be prudent to infer that the demand-supply gap of Li will be fluid and uncertain over the next few years. But there’s nothing that will make us infer that India, or for that matter, any other country worldwide, will have a serious supply chain issue with Lithium production until about 2025, and perhaps even until 2030.


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About Narasimhan Santhanam (Narsi)

Narsi, a Director at EAI, Co-founded one of India's first climate tech consulting firm in 2008.

Since then, he has assisted over 250 Indian and International firms, across many climate tech domain Solar, Bio-energy, Green hydrogen, E-Mobility, Green Chemicals.

Narsi works closely with senior and top management corporates and helps then devise strategy and go-to-market plans to benefit from the fast growing Indian Climate tech market.

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