A recent International Energy Agency (IEA) study says China accounts for 58% of lithium processing globally, followed by Chile (29%) and Argentina (10%), though Australia accounts for 52% share, followed by Chile (22%) and China (13%) in extracting this mineral. According to McKinsey, most of the confirmed lithium reserves are found in Latin America and Australia (5.7 MT). Of the top ten countries with the largest concentration of lithium reserves, Chile tops the list, with 9.2 million MT (obtained from brines), followed by Argentina (2.2 MT), China (1.5 MT) and less than one MT in Mexico, Canada, Congo, Mali and Zimbabwe.

"The Indian EV industry is heavily dependent on imported cells from China and Taiwan. With this new development, battery costs are expected to come down significantly, as we will now be able to source cells from within the country", says Varun Goenka, CEO & Co-Founder, Chargeup.

Since July 2022, spot prices for battery-grade lithium grew by over 400 percent year over year, while nickel prices more than doubled in the same period, owing to recent market disruptions following the Russian invasion of Ukraine and years of underinvestment in the mining sector, says McKinsey's experts in a recent briefing note on 'Sustainable and inclusive growth'.

"EV projections show demand for these materials (lithium, nickel and cobalt) ranging from two to 12 times the current levels by 2030, depending on the mineral, with the largest growth rate for lithium. Under the 'Fading Momentum' scenario (slower uptake of EVs and less plastic recycling/avoidance due to tech/supply delays and lack of regulation enforcement), the gap between the supply of materials and the demand required to reach 29 percent of new car sales is around 3.7 to 5.2 MT by 2030, estimates McKinsey.

"The unavailability of Lithium has been one of the reasons why India has been dependent on other countries for Li-Ion batteries and other EV components. Lithium being one of the core elements of the Li-Ion batteries and taking into consideration the financial impact of sourcing Lithium, the recent discovery of Lithium reserves in J&K does come in as a new lease of life as it further enables India’s ambition to become self-sufficient in its energy storage needs", says Pankaj Sharma, Co-Founder and Director of Log 9 Materials, a battery-tech start-up.

EV production

India discovers lithium; may take years to get into batteries