Lithium is expensive due to booming demand (especially for EVs) outstripping slow supply growth, complex extraction from brines/ores, energy-intensive refining into battery-grade material, and high manufacturing costs for the final battery components like management systems, requiring significant investment in new mines and processing facilities. The limited number of producers and supply chain bottlenecks further contribute to high prices, although recent price fluctuations have occurred due to market rebalancing efforts.
As of early January 2026, battery-grade lithium carbonate and hydroxide prices are in the $13 - $17 USD per kilogram range, varying slightly by grade and region (CIF Asia). Prices fluctuate significantly, dropping from late 2022 highs, with producers adjusting supply, but market analysts anticipate long-term deficits if prices don't rise to incentivize new production.
Lithium-ion batteries use numerous rare earth minerals, like lithium and cobalt. Because the supply of lithium is not able to keep up wit demand, the lithium price has increased by over 600% in the past few years. This is the primary reason why they have become so expensive.
Yes, Warren Buffett's company, Berkshire Hathaway, is actively investing in lithium production through a joint venture with Occidental Petroleum (OXY) to extract it from geothermal brine in California, aiming for a domestic supply for the EV market, even though he's traditionally avoided direct lithium mining stocks. They are using advanced Direct Lithium Extraction (DLE) technology to turn a byproduct of geothermal energy into valuable battery-grade lithium.
Unlike fossil fuels it is not consumed and will be recycled. In short, there's a few orders of magnitude of more lithium around than anyone will ever need. It all comes down to price of extraction. Taking enough out of the oceans for everybody to have a Tesla won't even take 0.1% of what's there.
Sodium-Ion Batteries
Sodium is far more abundant than lithium, paving the way for a cost-efficient alternative.
As of 2023, Bolivia is the country with the largest lithium reserves in the world with 23 million tons of lithium in total which is primarily located beneath the Salar de Uyuni salt flat.
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Lithium is a lightweight metal used in the cathodes of lithium-ion batteries, which power electric vehicles. The need for lithium has increased significantly due to the growing demand for EVs. The three largest producers of lithium are Australia, Chile and China.
Lithium demand may rise due to ongoing EV and energy storage needs, despite the current market balance. Investors could see long-term gains from lithium stocks, despite recent price drops and market volatility. QuantumScape develops advanced batteries, potentially enhancing future EV performance and safety.
If oil was the blood of 20th-century civilization, then lithium is the pulse of the 21st. Known as “white gold,” this lightweight mineral is the irreplaceable component in the batteries that power everything from smartphones to electric vehicles (EVs).
Like mining for other metals, lithium mines are resource-intensive, requiring large amounts of land and freshwater. Lithium mines also release harmful emissions during the mining process, contributing to environmental impacts.
After a turbulent 2025 marked by oversupply and price drops, a lithium rebound is underway. Experts believe 2026 could be a year of rebalancing, driven by energy storage and geopolitical shifts.
Powering Electric Mobility Revolution
India's EV growth depends on stable supply of these minerals, especially lithium-ion battery components. India imports 100% of lithium and cobalt; over 70% of lithium from China. These are critical for schemes like FAME II and EV production targets.
China's the largest consumer of lithium because of its booming electronics and electric vehicle industries.
A battery generally contains between 3 and 5 kg of lithium, although the battery in the Tesla Model S contains around 62.6 kg.
Top 4 Largest Lithium Reserves by Country
Lithium - India has discovered lithium reserves in the states of Karnataka and Jammu & Kashmir. Cobalt & Nickel - Cobalt, & Nickel is generally found in association with copper ores. Small deposits are known to exist in Odisha and Jharkhand. India's reserves are relatively modest.
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Currently, India imports nearly 100% of its lithium, with the majority coming from China, which controls 60–70% of global refining capacity. Without domestic refining infrastructure, India remains exposed to geopolitical risks, supply bottlenecks, and price volatility.
1. The 2022 annual global consumption of lithium was 180,000 tons. But by 2025, this number is projected to increase to between 393,000 to 493,000 tons. [2,3] Dividing the 21 million tons of lithium reserves by the extremes of this range reveals that lithium should be depleted within the next 43 to 53 years.
At the end of 2021, Tesla inked a three-year lithium supply deal with top lithium producer Ganfeng Lithium (OTC Pink:GNENF,SZSE:002460), and the Chinese company began providing products to Tesla starting in 2022.