The consensus view among automakers is that EV buyers demand range above all other factors and that, by extension, EV battery packs must necessarily get bigger over the coming years. But consider the graphic below. The line represents the maximum expected lithium supply available to the EV market in 2030 as the product of two variables: EV sales and average battery pack size. Everything below the line is the possibility space: a viable combination of sales and pack size. The space above the line represents the set of combinations that cannot be satisfied unless the supply of lithium to the EV market grows.

Forecasts for EV sales in 2030 vary, with a rough consensus in the range of 40-50 million vehicles with an average battery pack size of 50-60kWh. It’s clear from the graphic that such a scenario is impossible unless lithium supply to the EV market grows by a factor of 2-3x vs current expectations.

Given how unlikely it is that lithium supply will grow anywhere near that rapidly, the EV industry faces a choice: either the average battery pack size must get smaller, or EV sales in 2030 will fall far short of current expectations.

Exawatt made the above argument throughout 2022 at various EV and battery industry events, including the Fastmarkets European Battery Raw Materials Conference in Barcelona in September and the LME Focus day at the London Metal Exchange in October. At the time, our argument was somewhat controversial, but we note that the theme has been taken up by several industry commentators and appears to be well on its way to mainstream acceptance.

Contact us to find out more about lithium supply/demand and the impact of EV battery size on future EV sales.