The United States quickly established itself as the world’s most important petroleum producer and consumer in the early days of the fuel oil industry. But over time, declining production and the discovery of oil in other parts of the world have eroded US dominance in the petroleum industry. While the United States remains the world’s largest consumer, the country is increasingly dependent on foreign oil.
And now the exact same case is happing in the lithium industry also. A white paper published by OneCharge, a California-based lithium-ion battery supplier, states: “By 2034, electric vehicles in the United States alone will require 500,000 metric tons of unrefined lithium. The United States produces only a fraction of this demand. On the other hand, the total global production of lithium in 2020 was 440,000 metric tons. But most of it is not pure enough to be used in batteries. ”
China has invested heavily in lithium-ion battery production. China controls the maximum share of the global lithium-ion battery supply chain, and its market share has grown by another 12 percent over the past two years. Just as OPEC is the most influential organization in the field of fuel oil, China can become a single regulator in the case of lithium.
Just as the United States has become increasingly dependent on foreigners for its petroleum demand, so too has the country become dependent on lithium. According to the BP Statistical Review, China holds 7.9 percent of the world’s total lithium reserves. The United States has 4 percent. (Most lithium reserves are in South America and Australia). Yet China is the third-largest producer of lithium in the world. In terms of production, China surpassed the United States in 2020.
