The lithium market is stretched. Sales of electric vehicles (EVs) in China have increased substantially in the last few years. Manufacturers of the batteries that power these EVs are finding it increasingly difficult to secure the lithium raw materials they need. Years of slow supply growth have left the market scrambling to meet a sudden supply shortfall as rechargeable battery technology becomes more prolific.
The growth in demand for EVs is very much driven by China. In 2015, China experienced a 400 per cent year-on-year surge in EV sales. President Xi Jinping has set a target of five million ‘new energy’ vehicles on the road in China by 2020; the 134 per cent growth in EV sales in the first five months of 2016 compared to the same period of 2015 suggests that this target is achievable.