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Global Lithium Market Poised to More Than Double to 2.44M LCE Tons by 2031, Fueled by EV & Energy Storage Demand

globenewswire.com
TSLA Tesla is mentioned as securing upstream lithium inputs ahead of time, indicating a proactive strategy to meet future needs driven by EV demand, which is a positive signal for the company. STLA Stellantis has contracted lithium hydroxide in preparation for European regulations phasing out combustion engines by 2035. This forward-looking strategy suggests a positive outlook for their EV transition and related supply chain.

Dublin, Jan. 20, 2026 (GLOBE NEWSWIRE) -- The "Lithium - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2026-2031)" has been added to ResearchAndMarkets.com's offering.

The global lithium market is projected to witness substantial growth, with the market size estimated at 1.01 million LCE tons in 2026, increasing from 0.85 million LCE tons in 2025, and expected to reach 2.44 million LCE tons by 2031. The market is set to grow at a Compound Annual Growth Rate (CAGR) of 19.24% during 2026-2031. Battery demand drives the increase as electric-vehicle sales and grid-scale storage mandates offer long-term clarity on demand. Hydroxide usage is expanding more rapidly than carbonate, aligned with the increasing preference for high-nickel cathodes in premium electric vehicles. New direct-lithium-extraction projects are reducing project lead times, improving miners' response to demand spikes and environmental sustainability. China leads processing but has limited reserves, while Europe is investing downstream to mitigate supply risks. Consolidation among top producers and tech firms is escalating competition and supporting larger capital expenditures.

Global Lithium Market Trends and Insights

EV Penetration Targets and Battery-Cost Parity - The push towards achieving USD 100/kWh for battery packs is enabling cost parity between electric and combustion vehicles, boosting adoption rates even as subsidies decrease. Automotive companies like Tesla are securing upstream inputs ahead of time to meet future needs, as seen with their sizeable spodumene offtake from Liontown Resources. Stellantis has similarly contracted lithium hydroxide to prepare for European regulations phasing out combustion engines by 2035. The lithium market is adapting as higher-nickel cathodes necessitate hydroxide over carbonate. Momentum is building in the U.S. market, aligning with federal zero-emission targets.

Grid-Scale Storage Mandates (>4 h) in US, EU, and China - Storage mandates are ensuring steady lithium demand beyond vehicles. The U.S. Inflation Reduction Act and China's 14th Five-Year Plan establish legally binding storage targets, reducing revenue volatility for producers and stabilizing long-term pricing. Europe anticipates a need for 200 GW of storage by 2030 to balance renewable energy.

Short-Cycle Oversupply from Tier-2 Chinese Converters - Chinese lithium carbonate capacity has expanded significantly, resulting in excess being dumped on spot markets, causing price drops that deter investments. However, environmental and process costs are expected to phase out less efficient producers, eventually leading to price stabilization.

Other Market Drivers and Restraints Include:

Segment Analysis - Lithium hydroxide is projected to grow at 23.02% CAGR due to its application in high-nickel cathodes, while lithium carbonate holds a 64.78% market share in 2025. The hydroxide premium reflects its tighter supply and processing demands. Recycling initiatives in Europe favor hydroxide, further driving demand. Projects in Australia and the U.S. aim to optimize supply chains for hydroxide, while Chinese converters improve yields. As more automakers transition to high-nickel chemistries, lithium hydroxide becomes more predominant in contracts.

The report segments the lithium market by compound, application, end-user industry, and geography, projecting volumes in tons.

Geography Analysis - Asia-Pacific dominated with 61.65% market share in 2025 due to China's refining capabilities. Europe is the fastest-growing region, driven by robust local demand and strategic policies, while North America utilizes incentives under the Inflation Reduction Act. South America is evolving with new production and consumption insights, and the Middle East may gain traction with renewable energy projects.

List of Companies Covered:

For more information about this report visit https://www.researchandmarkets.com/r/gbipkd

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