The International Energy Agency (IEA) reported that lithium-iron phosphate (LFP) batteries have significantly overtaken lithium nickel manganese cobalt (NMC) batteries in the electric vehicle (EV) market.
THE REPORT
In its report titled the Global Critical Minerals Outlook 2025, the IEA detailed its forecast for the mineral market and its trends for the coming year. According to the website, it “offers medium- and long-term projections for the supply and demand of key energy materials, taking into account the latest policy and technology developments.”
The IEA reports that China, Australia, and Chile will be the top three producers of lithium in mining by the year 2030. Meanwhile, the top three in refining will be China, Chile, and Argentina. By 2040, the IEA predicts that the EV market will demand around 750 kt of lithium, more than triple the demand in 2024. According to Reuters, “lithium will remain the dominant battery metal in a fast-changing landscape.”
The IEA previously named China a “top producer” of batteries, with the country selling their batteries at cheaper price points compared to Europe and North America. The agency cited these affordable prices as a driving factor in the ease of availability of EVs in China.
PREDICTIONS AND RECOMMENDATIONS
While the IEA predicts steady growth for lithium, its prediction for cobalt and nickel are not as prosperous. The agency recommends industry experts to “revise down their estimates for cobalt and nickel demand.”
This prediction brings good news for the environment as cobalt and nickel are mined from rainforest-heavy countries such as Congo (cobalt) and Indonesia (nickel). Climate Home News cited a study by the Vienna University of Economics and Business and négaWatt in saying that “deforestation would drop by 43% by 2050” if the EV market shifts to LFP batteries from NMC.
Thanks to manufacturing trends driven by China’s battery production, the once unusable LFP battery is now a cheaper and viable option for battery-powered vehicles. Growth of EV makers like BYD can be attributed to the power LFP batteries provide at an affordable price.
While China dominates the global battery supply chain, the IEA called for international collaboration. “Many individual markets might not be sufficiently large to justify the necessary investments in the manufacturing of batteries and their components,” wrote the IEA’s Lombardo, Paoli, Pales, and Gul. “And so may require closer collaboration with other EV and battery markets, as well as cooperation with resource-rich countries such as those in South America and Africa, Australia, Indonesia, to make the case.”
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