East Asia has sufficient supply of lithium batteries for energy storage

China's lithium battery industry is seeing rapid growth amid sky-high demand from the electric car and renewable energy industries. However, a reliance on imports for key materials leaves the industry vulnerable to price fluctuations and imbalanced development within the domestic supply chain.

The US was in sixth place last year. China has once again been ranked top for involvement in the global lithium-ion battery supply chain by BloombergNEF, but for the first time the US has come in second amid a policy rush to support the domestic industry.

The government is now calling on local authorities and industry players to address issues such as the high cost of raw materials, quality inconsistencies, and lopsided supply and demand. China has been the single largest consumer of lithium-ion (or li-ion) batteries for five consecutive years.

China relies on imports of lithium chemicals from Australia for downstream productions, but it can source lithium from other channels, including its domestic supplies or from South America. Yet China's dominance in lithium processing means that few countries could absorb Australia's supply if China looks to alternative sources.

This study evaluates lithium supply-demand conflicts in the three primary EV markets by 2030 across 16 scenarios, factoring in battery capacity, policy commitments, and domestic production. Despite significant growth in domestic lithium production, major EV markets cannot achieve self-sufficiency.

These findings suggest that unless China receives additional raw materials supplies, achieving a lithium supply-demand balance under scenarios of low supply and maximum battery capacity (low-S7, low-S8) is unattainable in the current trade network structure, even if import capabilities are expanded to the maximum.