Lithium is in high demand, primarily driven by the global electric vehicle (EV) revolution. Lithium-ion batteries account for over 80% of global lithium consumption. European demand has soared significantly, reflecting the continent's ambitious targets to phase out internal combustion engine vehicles by 2035: European EV sales increased by over 60% annually between 2020 and 2023. Lithium also has broader industrial uses, including glass, ceramics, and grid-scale energy storage systems. While demand for battery-grade lithium tracks the expansion of clean energy initiatives, supply chain constraints have historically led to extreme price volatility.
To meet this demand, vast salt flats in South America's 'Lithium Triangle' (Chile, Argentina, and Bolivia) are being rapidly developed. Breakthroughs in direct lithium extraction (DLE) technology have made processing faster and more cost-effective, bypassing the need for massive, slow-operating evaporation ponds. Meanwhile, global projections suggest that by 2030, demand for lithium will exceed 2.4 million metric tons of lithium carbonate equivalent, compared to just 500,000 tons in 2021. This rapid growth has triggered environmental concerns over water scarcity and local biodiversity disruption in arid regions.
Extract B states that the global market for lithium has been accelerated by 'breakthroughs in direct lithium extraction (DLE) technology'.
With the help of a diagram, explain how cheaper extraction technology and a surge in electric vehicle production in Europe have led to growth in the global market for lithium.
