Earlier this month, Albemarle Corporation, the world’s largest lithium provider for electric vehicle batteries, announced its second-quarter results. The company saw net sales of $2.4 billion, an increase of 60% year over year, and net income of $650 million, also a rise of 60% year over year. They also announced an agreement with Ford Motor Company. Between 2026 and 2030, Albemarle will supply over 100,000 metric tons of lithium hydroxide to the auto manufacturer. And Albemarle was named to the Fortune 500 rankings and the TIME100 Most Influential Companies list.¹

And all of this was driven by growing global lithium demand to feed the transition to electric vehicles (EVs).

Lithium is a crucial element for renewable energy, playing a pivotal role in the lithium-ion batteries that power EVs and store renewable energy from solar and wind. As countries embrace cleaner energy solutions, lithium’s demand is set to surge, propelling its value higher despite increased supply.²

The International Energy Agency (IEA) predicts a staggering 30-fold rise in mineral demand for EV battery use by 2040. Auto giants like General Motors, Volkswagen, Ford, and BMW aim for a complete shift to electric vehicles by 2035. And in Q1 2023, U.S. sales of battery-powered cars and plug-in hybrids surged by 45% year-on-year, indicating the growing traction of EVs.³

Given the exponential growth of EV adoption, investors need to understand the importance of lithium-ion batteries to the industry, the challenges of meeting the demand for lithium, and the potential for growth in the lithium mining sector.

EV Adoption Booming Worldwide and Expected to Continue

To explain why lithium is so essential, look no further than the IEA’s recent “Global Electric Vehicle Outlook” report. Lithium’s relevance is apparent in the remarkable global growth of electric vehicles highlighted by the report.

Global sales of battery-electric cars and plug-in hybrids surged past the 10 million mark in 2022, capturing 14% of the overall global car market for the first time. The IEA projects that EV sales will pass 14 million globally in 2023, for an 18% market share. This growth is all the more impressive considering that EV sales were just 5% of the global market as recently as 2020.

The epicentre of this growth is, of course, China. The Chinese market accounts for 60% of global EV sales and has already surpassed its own 2025 sales targets. In second place is Europe, where there was 15% growth in EV sales in 2022, making one in five new cars sold last year electric. The United States, the third-largest market, recorded a remarkable 55% increase in electric car sales in 2022, accounting for 8% of total sales.

And the IEA estimates global EV sales could reach 35% of all new vehicles by 2030—an increase from their earlier projections of 25%–thanks to EV-friendly policies being enacted around the world. Such policies include the E.U.’s new Fit for 55 package of legislation, which lays out tough new CO2 standards for vehicles, as well as the U.S. Inflation Reduction Act, which provides incentives for greater EV adoption, and the strict California Advanced Clean Cars II emissions regulation which a number of other states have adopted.⁴

With all those new EVs comes the need for more and more batteries and the lithium that makes them possible.

Lithium’s Role in Battery Technology

At the heart of the EV revolution is the lithium-ion battery. These batteries offer a compelling blend of attributes, including their power-to-weight ratio, fast charging, performance even at high temperatures, and their ability to hold a significant charge relative to their total weight. This is a significant benefit in EV engineering, where the more excess weight an EV can shed from its components, the farther it can travel on a single charge.⁵

And so, with growing demand for EVs comes growing demand for lithium-ion batteries.

In 2022, global demand for automotive batteries surged 65% to 550 GWh, up from 330 GWh just a year earlier. China’s vehicle battery demand alone soared by over 70% in 2022 compared to 2021. In the United States in 2022, battery demand for vehicles experienced an 80% YoY boost, despite electric car sales only rising by around 55% during the same period.⁶

Globally, batteries dominated lithium consumption in 2022, accounting for nearly 80% of the total. This share is projected to climb to 90% by 2028 as electric vehicle adoption rises due to falling EV prices.⁷

This suggests the long-term growth potential for lithium due to demand caused by the green energy transition and the need for batteries across both the automotive and renewables sector.

How Much Lithium Is Needed?

So, just how much lithium will we need to help drive the transition to EVs? A great deal, it turns out.

A 70 kWh Tesla battery holds about 62.6 kilograms of lithium carbonate, resulting in approximately 82,000 tonnes needed for Tesla’s 1.31 million EVs sold in 2022 alone. With 10.6 million EVs sold in 2022, that means around 663,500 tonnes of lithium carbonate were required for their batteries.

With millions of EVs on the road, the race to achieve the IEA’s target of 200 million EVs by 2030 implies an astonishing 17.9-fold increase in lithium demand over the next seven years. This projection amounts to approximately 12.52 million tonnes of lithium carbonate by 2030, dwarfing 2021 production by more than 23 times.

As it stands, global lithium demand is expected to be the equivalent of 989,000 tonnes this year, which is 25,000 tonnes short of the total expected global production (964,000 tonnes) in all of 2023.8 This necessitates a rapid scaling of mining and processing efforts to accommodate the clean energy transition and EV proliferation.

Investing in Electric Vehicles with ETFs

The auto industry is undergoing the biggest transformation in our lifetimes and there is a growing demand for ways to invest in this industry.

The Evolve Automobile Innovation Index Fund (CARS), is Canada’s first automobile innovation ETF. CARS ETF takes a diversified approach to invest in the development of electric cars, self-driving cars, and automobile innovation, including in some of the world’s leading manufacturers and automobile companies. CARS ETF is a great way to gain access to the future of the automobile and shift your investments into gear. For more information about the Evolve Automobile Innovation Index Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.



  1. “Albemarle Reports Net Sales Increase of 60% for Second Quarter,” Albemarle Corporation, August 2, 2023; https://s201.q4cdn.com/960975307/files/doc_earnings/2023/q2/earnings-result/Q22023_pressrelease.pdf
  2. Bourlioufas, N., “Lithium prices to keep rising as demand outpaces supply,” Australian Financial Review, May 16, 2023; https://www.afr.com/wealth/investing/lithium-prices-to-keep-rising-as-demand-outpaces-supply-20230508-p5d6m3
  3. Valerio, P., “Is There Enough Lithium for Massive EV Adoption?,” EPS News, July 11, 2023; https://epsnews.com/2023/07/11/is-there-enough-lithium-for-massive-ev-adoption
  4. “Global EV Outlook 2023: Catching up with climate ambitions,” International Energy Agency, April 2023; https://iea.blob.core.windows.net/assets/dacf14d2-eabc-498a-8263-9f97fd5dc327/GEVO2023.pdf
  5. “How do electric car batteries work?,” EnergySage, November 28, 2022; https://www.energysage.com/electric-vehicles/101/how-do-electric-car-batteries-work/
  6. “Global EV Outlook 2023: Trends in batteries,” International Energy Agency, April 2023; https://www.iea.org/reports/global-ev-outlook-2023/trends-in-batteries
  7. Bourlioufas, N., “Lithium prices to keep rising as demand outpaces supply,” Australian Financial Review, May 16, 2023; https://www.afr.com/wealth/investing/lithium-prices-to-keep-rising-as-demand-outpaces-supply-20230508-p5d6m3
  8. Ibid
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