A new report warns that the rapid growth in electric vehicle demand could lead to a significant lithium shortage by 2028, prompting calls for urgent investment and policy action to avoid supply shocks in the decarbonisation race.
Automakers and battery makers face an accelerating mismatch between future lithium needs and the projects currently in the pipeline, according to a new assessment by consultancy Wood Mackenzie.
The firm’s Energy Transition Outlook for Lithium models four pathways for how the energy transition could unfold and finds that lithium demand in 2050 ranges from about 5.6 million tonnes of lithium carbonate equivalent (Mt LCE) under a slow, delayed transition to roughly 13.2 Mt LCE on a Net Zero trajectory. Electric vehicles are identified as the principal growth engine for the market, accounting for roughly 72–80% of lithium consumption across the scenarios, while rechargeable batteries for all uses are expected to drive 96–98% of demand by mid‑century. According to Wood Mackenzie, existing projects will be insufficient to cover demand beyond the mid‑2030s in most scenarios, and shortfalls could begin as early as 2028 if policy and market momentum accelerate.
“The lithium market is heading into a supply crunch much sooner than many industry players expect,” Allan Pedersen, research director at Wood Mackenzie, said. “The industry needs to act now should governments progress policies towards net zero. Projects approved today will determine market balance in the critical 2030s.”
Wood Mackenzie quantifies the capital task as unprecedented. Total investment required to bring supply, refining capacity and regional value chains into alignment ranges from about $104 billion under a delayed transition to as much as $276 billion on a Net Zero pathway, with investment activity forecast to peak between 2030 and 2034. “This is a $100-275billion (£75-206billion) investment story depending on how the energy transition unfolds,” Rebecca Grant, senior research analyst at the firm, said, adding that the strategic winners will be those able to allocate capital swiftly while managing trade fragmentation and securing regional market access.
The scale and timing of the gap matter for industrial decarbonisation plans. McKinsey analysis of the battery sector underscores how fast demand is changing: Li‑ion battery capacity surpassed 1.0 terawatt‑hour in 2024 and is on course to approach 1.6 TWh in 2025, while an estimated global overcapacity of about 900 gigawatt‑hours in 2025 points to short‑term mismatches between cell assembly and upstream raw material availability. According to McKinsey, the industry must accelerate technology adoption, localise supply chains and relieve production bottlenecks to avoid creating new chokepoints as vehicle electrification scales.
The implication for OEMs, battery suppliers and policymakers is twofold. First, sourcing risk shifts from later stages of the value chain back to raw materials: securing reliable lithium feedstock, building refining and conversion capacity and establishing resilient regional supply chains will determine whether manufacturers can meet electrification roadmaps without costly interruptions. Second, the capital intensity and long lead times of mining and processing projects mean that decisions taken in the remainder of this decade will shape market balance in the 2030s.
Wood Mackenzie warns that without faster project approvals and higher investment levels, policy ambition could outpace supply. The firm highlights that under a “delayed transition” scenario the market remains balanced until the mid‑2030s before moving into a deficit; under a Net Zero pathway deficits appear much sooner. Industry and government interventions to speed permitting, de‑risk investments and spur downstream refining capacity are implied as necessary to avert supply shocks.
For stakeholders planning industrial decarbonisation programmes, the report signals that battery cell capacity alone will not guarantee smooth electrification. Companies should be preparing supply strategies that extend to raw materials, refining and regional logistics, and consider alternatives such as increased recycling, chemistry diversification and strategic offtake agreements to reduce exposure to upstream shortfalls. According to Wood Mackenzie, the central question is no longer whether more lithium is needed but whether the sector can marshal capital and policy support quickly enough to match demand while navigating a more fragmented global trading environment.
- https://www.gbnews.com/lifestyle/cars/electric-car-switch-jeopardy-lithium-supply – Please view link – unable to able to access data
- https://www.woodmac.com/press-releases/lithium-eto-2026/ – Wood Mackenzie’s latest Energy Transition Outlook for Lithium warns that global lithium demand could exceed 13 million tonnes by 2050 under an accelerated energy transition. Without significant new investment, supply deficits could emerge as early as 2028. The report models four energy transition scenarios, with lithium demand in 2050 ranging from 5.6 million tonnes of lithium carbonate equivalent (Mt LCE) under a delayed transition to 13.2 Mt LCE under a net zero pathway. Even under the base case, existing supply projects are unlikely to meet demand beyond the mid-2030s. Electric vehicles are projected to account for 72% to 80% of lithium consumption across all scenarios, with rechargeable batteries representing 96% to 98% of total use by 2050. Meeting demand requires unprecedented investment, with total investment requirements ranging from approximately $104 billion in a delayed transition to $276 billion under a net-zero pathway. Investment is expected to peak between 2030 and 2034, driven by the need for new mining capacity, refining infrastructure, and regional supply chains.
- https://www.indexbox.io/blog/lithium-supply-deficits-could-start-by-2028-requiring-up-to-276-billion-investment/ – A recent report from Wood Mackenzie indicates that global demand for lithium could surpass 13 million tonnes by 2050 in an accelerated energy transition scenario, more than doubling the base case projection. The analysis suggests that without substantial new investment, supply deficits could begin as early as 2028. Even under a more conservative base case, existing supply projects are projected to be insufficient to meet demand after the mid-2030s. The firm’s models present four potential pathways, with lithium demand in 2050 ranging from 5.6 million tonnes of lithium carbonate equivalent in a delayed transition to 13.2 million tonnes in a net zero scenario. Electric vehicles are identified as the dominant demand driver, responsible for 72% to 80% of total lithium consumption. By 2040, EV adoption is projected to reach about 75% under a Country Pledges scenario and 95% under a Net Zero scenario. Rechargeable batteries for all applications are forecast to account for 96% to 98% of lithium use by mid-century. Meeting demand requires unprecedented investment, with total investment requirements ranging from approximately $104 billion in a delayed transition to $276 billion under a net-zero pathway. Investment is expected to peak between 2030 and 2034, driven by the need for new mining capacity, refining infrastructure, and regional supply chains.
- https://www.mckinsey.com/features/mckinsey-center-for-future-mobility/our-insights/battery-2035-building-new-advantages – McKinsey’s ‘Battery 2035: Building New Advantages’ report discusses the rapid evolution of the global lithium-ion battery industry. Demand for Li-ion batteries crossed the milestone threshold of 1.0 terawatt-hours (TWh) in 2024 and is projected to reach nearly 1.6 TWh in 2025. The report highlights the need for adopting rapidly evolving technologies, localising supply chains, and overcoming production bottlenecks in the battery industry to meet the growing demand for electric vehicles and energy storage systems. It also notes that global overcapacity of Li-ion batteries was approximately 900 gigawatt-hours (GWh) in 2025, indicating a need for strategic planning to align supply with demand.
- https://www.fuelsandlubes.com/lithium-supply-deficit-could-hit-as-early-as-2028-wood-mackenzie-warns/ – Wood Mackenzie’s latest Energy Transition Outlook for Lithium warns that global lithium demand could exceed 13 million tonnes by 2050 under an accelerated energy transition, but without significant new investment, supply deficits could emerge as early as 2028. The report models four energy transition scenarios, with lithium demand in 2050 ranging from 5.6 million tonnes of lithium carbonate equivalent (Mt LCE) under a delayed transition to 13.2 Mt LCE under a net zero pathway. Even under the base case, existing supply projects are unlikely to meet demand beyond the mid-2030s. Electric vehicles are projected to account for 72% to 80% of lithium consumption across all scenarios, with rechargeable batteries representing 96% to 98% of total use by 2050. Meeting demand requires unprecedented investment, with total investment requirements ranging from approximately $104 billion in a delayed transition to $276 billion under a net-zero pathway. Investment is expected to peak between 2030 and 2034, driven by the need for new mining capacity, refining infrastructure, and regional supply chains.
- https://www.miningweekly.com/article/lithium-demand-could-exceed-13mt-by-2050-woodmac-2026-03-03 – Wood Mackenzie’s latest Energy Transition Outlook for Lithium warns that global lithium demand could exceed 13 million tonnes by 2050 under an accelerated energy transition, more than doubling base case projections. Without significant new investment, supply deficits could emerge as early as 2028. Even under the base case scenario, existing supply projects are unlikely to meet demand beyond the mid-2030s, highlighting the need for sustained investment across the value chain. The report models four energy transition scenarios, with lithium demand in 2050 ranging from 5.6 million tonnes of lithium carbonate equivalent (Mt LCE) under a delayed transition to 13.2 Mt LCE under a net zero pathway. Electric vehicles are projected to account for 72% to 80% of lithium consumption across all scenarios, with rechargeable batteries representing 96% to 98% of total use by 2050. Meeting demand requires unprecedented investment, with total investment requirements ranging from approximately $104 billion in a delayed transition to $276 billion under a net-zero pathway. Investment is expected to peak between 2030 and 2034, driven by the need for new mining capacity, refining infrastructure, and regional supply chains.
- https://www.indexbox.io/blog/wood-mackenzie-warns-of-looming-lithium-supply-crunch-by-2028/ – A recent report from Wood Mackenzie indicates that global demand for lithium could surpass 13 million tonnes by 2050 in an accelerated energy transition scenario, more than doubling the base case projection. The analysis suggests that without substantial new investment, supply deficits could begin as early as 2028. Even under a more conservative base case, existing supply projects are projected to be insufficient to meet demand after the mid-2030s. The firm’s models present four potential pathways, with lithium demand in 2050 ranging from 5.6 million tonnes of lithium carbonate equivalent in a delayed transition to 13.2 million tonnes in a net zero scenario. Electric vehicles are identified as the dominant demand driver, responsible for 72% to 80% of total lithium consumption. By 2040, EV adoption is projected to reach about 75% under a Country Pledges scenario and 95% under a Net Zero scenario. Rechargeable batteries for all applications are forecast to account for 96% to 98% of lithium use by mid-century. Meeting demand requires unprecedented investment, with total investment requirements ranging from approximately $104 billion in a delayed transition to $276 billion under a net-zero pathway. Investment is expected to peak between 2030 and 2034, driven by the need for new mining capacity, refining infrastructure, and regional supply chains.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article references a press release from Wood Mackenzie dated 3 March 2026, indicating recent information. However, the GB News article was published on 3 March 2026, suggesting timely reporting. No evidence of recycled or outdated content was found.
Quotes check
Score:
7
Notes:
Direct quotes from Allan Pedersen and Rebecca Grant are included. While these quotes are present in the Wood Mackenzie press release, the GB News article does not provide direct links to verify these quotes independently. The absence of direct verification raises concerns about the authenticity of the quotes.
Source reliability
Score:
6
Notes:
The primary source is a press release from Wood Mackenzie, a reputable consultancy. However, the GB News article does not provide direct links to the original press release, which is essential for independent verification. The reliance on a single source without direct access to the original material diminishes the overall reliability.
Plausibility check
Score:
7
Notes:
The claims about potential lithium supply deficits and the need for substantial investment align with industry concerns. However, the lack of direct access to the original press release and the absence of corroborating sources in the GB News article raise questions about the accuracy and completeness of the information presented.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The GB News article reports on a recent Wood Mackenzie press release regarding potential lithium supply deficits. However, the article lacks direct links to the original press release and does not provide corroborating sources, raising concerns about the accuracy and completeness of the information. The reliance on a single source without independent verification diminishes the overall reliability of the content.
