Developed in the 1970s and commercialized in the 1990s, lithium batteries are characterized by higher energy density, higher energy efficiency, a longer cycle life, and a longer calendar life compared to other rechargeable batteries. Lithium has become more prevalent in a wide range of applications, including consumer electronics and medical devices, industrial applications such as forklifts and warehouse automation, electric vehicles (EVs) and energy storage systems.
Electricity consumption in the U.S. totaled 4,000 terawatt-hours in 2023 and is expected to increase almost 30 percent by 2050. Electrification is driving the demand for power, with the rise of the lithium battery and its association with clean energy efforts at its core. This trend will continue as more lithium battery manufacturing capacity is added and the cost of lithium batteries decreases.
Electrification has made the U.S. more dependent on lithium battery technology. To ensure energy security and independence, we must work to build a vertically integrated domestic supply chain for lithium batteries.
Click to download infographic
Lithium Demand Vs. Supply
Demand for lithium batteries in EVs and stationary storage reached approximately 950 GWh in 2023. The U.S. alone is expected to increase lithium demand by almost 500 percent by 2030. Meanwhile, global manufacturing capacity was about 2,600 GWh.
Even though global lithium supply is projected to increase to more than 2.14 million metric tons by 2030, experts estimate a supply deficient between 300,00 and 768,000 tons by the same year.
Current Lithium Supply Chain
Lithium mining is limited to a few countries. Australia, Chile and China account for 90 percent of production. At the same time, China currently controls 72 percent of global refining capacity and 77 percent of global lithium battery production capacity.
The U.S. is expected to increase capacity more than 10 times over the next five years, moving into second place. The Inflation Reduction Act (IRA) and CHIPS and Science Act have resulted in $388 billion total investment dollars for the U.S. manufacturing industry. The Section 45X Advanced Manufacturing Production Credit, part of the Inflation Reduction Act (IRA), provides a credit for the production and sale of certain eligible components within the United States, including solar and wind energy components, inverters, qualifying battery components, and applicable critical minerals. This credit has contributed to more than $126 billion in manufacturing investment announcements since inception.
Despite these investments to compete, and the future of some of this government funding is uncertain, China is projected to remain in that dominant position.
A Domestic Lithium Supply Chain
Establishing a domestic lithium battery supply chain is necessary to reduce our dependence on countries of concern. A robust supply chain spans mining and processing, cell manufacturing and assembly, and recycling.
Silver Peak lithium mine in Nevada is the only active lithium mine in the U.S., generating about one percent of global production. Plans to open additional mines in Nevada, California and North Carolina will help the U.S. build the foundation of a domestic supply chain.
Processing plants are the big missing piece of a domestic supply chain. The U.S. accounts for only one percent of global refined lithium. It is vital to maintain vertical integration by developing this aspect of the supply chain. Otherwise, lithium will be shipped overseas for processing, defeating the entire purpose.
Battery cell manufacturing and pack assembly also need to be further established. Currently, the U.S. captures less than 30 percent of the economic value of each battery cell on the U.S. market, equal to approximately $3 billion and 16,000 jobs. The Bipartisan Infrastructure Law assigned $6 billion in total funding for battery material processing and manufacturing.
Stryten Energy’s partner, Dragonfly Energy, is establishing lithium battery cell manufacturing that will be integrated into Stryten’s lithium batteries for military, material handling and stationary energy storage applications, including commercial & industrial, microgrids and utilities.
Earlier this year, Stryten opened a lithium assembly plant in Cumming, GA, to produce our Li700 series of forklift batteries. These domestically designed and assembled batteries ensure our customers have a source for high-performing material handling batteries from a plant in the U.S. We will also use our lithium module technology to launch lithium BESS solutions for energy resiliency in commercial and industrial applications.
Establishing a circular economy for lithium batteries is the final component. Recycling lithium batteries is complex, and the nascent industry faces difficulties to be profitable. Recycled material could potentially provide one-third of the U.S. cathode material needed for lithium batteries by 2030. That recycling could provide the critical materials needed to build U.S.-based lithium battery manufacturing.
