Lithium supply constraints and price surge tighten battery cost outlook

Lithium, classified by the U.S. Department of Energy as a highly critical mineral for electric‑vehicle batteries and grid storage, faces growing supply pressures. The United States relied on imports for more than half of its 2025 lithium consumption, chiefly from Chile and Argentina, while Australia leads hard‑rock production. China dominates both lithium‑brine and hard‑rock refining.

In 2023 lithium carbonate prices jumped over 30%, reaching peaks above $70,000 per tonne before moderating to $35,000‑$55,000 per tonne in early 2024. The price rise reflects tight supply, expanding battery gigafactories and limited processing capacity, with new mining projects emerging in Africa and South America but volatility remaining.

These dynamics raise the cost of batteries for electric vehicles and large‑scale energy storage, influencing broader electrification and infrastructure projects worldwide.