a 29 percent year-on-year increase that now makes lithium-battery
production one of the largest industrial activities in the world.
gigafactory capacity was six times its 2020 level, and lithium producers
faced a market whose structure is still settling.¹²
demand increased by 29 percent in 2025 to more than 1.6 terawatt-hours,
up from approximately 1.3 TWh in 2024.¹ The annual demand growth rate
compounded over the past five years represents one of the fastest ramps
of any industrial commodity in modern history — faster than oil in the
any precedent on the electricity-storage side.
remain the largest single segment, with battery demand rising 26 percent
year-on-year in 2025. Battery energy storage systems (BESS) grew faster,
at 51 percent. Consumer electronics, power tools and smaller devices
together provided incremental demand that has been relatively stable in
absolute terms.¹
grid-scale and behind-the-meter BESS markets during the year,
representing nearly 50 percent year-on-year growth.¹ Benchmark's forward
forecasts place 2026 installations at more than 450 GWh — another 40
percent jump.
sharply. Declining cell prices combined with volatile electricity
markets, growing renewable-energy penetration and increasingly
attractive capacity-market rules have made grid-scale battery
deployments profitable across multiple geographies simultaneously. The
markets all saw record BESS deployment in 2025.
it is less concentrated on high-performance battery chemistry than EVs.
kilowatt-hour than nickel-based chemistries, dominates BESS deployment.
downstream LFP cell manufacturers than for nickel-based cell producers —
reshaping the cathode-materials mix and, over time, the lithium-product
demand profile.
installed capacity grew six-fold between 2020 and 2025. The firm
forecasts another 118 percent growth by 2030, bringing capacity to more
than double the 2025 baseline.¹ That implies continued rapid
construction through the remainder of the decade — particularly in the
demand continues to pull capacity forward.
hosts the majority of global gigafactory capacity, but U.S. and European
additions have been accelerating. The Inflation Reduction Act's
domestic-content requirements for EV tax credits have catalysed a wave
of U.S. battery-manufacturing investment, and the Critical Raw Materials
forward. By 2030, the distribution of installed capacity is likely to be
meaningfully more balanced than it is today.
tonnes of lithium content in 2025, a 20 percent year-on-year increase.²
ramp, so the question going into 2026 is whether the ramp continues at
similar pace.
production excluding the United States rose 31 percent in 2025 to
approximately 290,000 tonnes, per USGS.² The oversupply conditions that
dominated early 2025 pricing reflect this supply response: too much
material entered the market ahead of demand, and prices consequently
softened. The second half of 2025 saw prices recover as demand absorbed
the supply cushion.
outpace supply additions. Benchmark's forecast suggests it may — 40-50
percent BESS growth plus continuing EV growth could push battery demand
toward 2.2-2.4 TWh, which would require a further significant lift in
lithium supply. If the supply side cannot match, prices firm
substantially. If supply continues to expand aggressively, the
oversupply risk persists.
contained lithium in 2025, per USGS.² Sigma Lithium's Grota do Cirilo
operation in Minas Gerais was the dominant single producer. With Phase 2
construction largely complete and targeting 520,000 tonnes of
concentrate per year at steady state, Brazilian output is positioned to
grow substantially through 2027-2028.
favourable. EU and U.S. battery makers have been actively seeking
non-Chinese lithium supply, and Brazilian concentrate — particularly
from Sigma, which has emphasised ESG credentials in its commercial
positioning — is attractive in the current policy environment. Korean
and Japanese cell producers have also engaged with Brazilian producers
on long-term offtake arrangements.
largely exported as concentrate rather than processed domestically into
battery-grade chemical