
As the global energy transition gains momentum, the road transport sector is undergoing a rapid transformation, with Electric Vehicles (EVs) gradually replacing Internal Combustion Engine vehicles. This shift towards EVs brings with it a soaring demand for Lithium-ion batteries, a trend that has given rise to the phrase “lithium is the new oil.” In this article, we explore the profound implications of this growth in EVs and the increasing significance of lithium as a key resource for energy storage in batteries, akin to the role that oil has played in fueling transportation and industry.
The Rise of Lithium as the “New Oil”
The phrase “lithium is the new oil” encapsulates the evolving importance of lithium as a critical resource for energy storage in batteries. Much like oil has been the lifeblood of transportation and industry for decades, lithium has emerged as the vital component in batteries powering Electric Vehicles (EVs) and renewable energy storage systems. The rapid ascent of EVs and the adoption of renewable energy sources have fueled an unprecedented surge in lithium demand. Some experts even project that the demand for lithium could increase by up to tenfold in the next decade, underlining its growing importance to the global economy.
Comparing Lithium and Crude Oil
While the demand for lithium, particularly in the context of EVs, may reduce the use of oil in road vehicle applications, it’s essential to note that crude oil serves a broader spectrum of purposes. Crude oil undergoes refining processes in oil refineries to yield an array of petroleum products. These products comprise intricate mixtures of hydrocarbons and find applications in various sectors, including transportation, heating, and electricity generation. Among the diverse range of petroleum products are gasoline, diesel fuel, jet fuel, heating oil, lubricants, waxes, asphalt, and more. Therefore, while lithium’s role in road transport may challenge oil consumption, oil will remain indispensable due to its multifaceted uses across numerous industries.
The Driving Force Behind Lithium Demand
At the heart of this burgeoning demand for lithium lies the overarching energy transition. The transition is powering the shift towards Electric Vehicles and Utility Scale energy storage systems, thus driving the need for lithium carbonate to fuel batteries. Projections indicate a seismic shift in the automotive landscape, with estimates suggesting that by 2033, EVs could constitute a staggering 50% of total car sales. This transformation is expected to continue, with approximately 8-9 years later, half of the total vehicle stock comprising Electric Vehicles. This transformative journey towards EVs and renewable energy sources cements lithium’s pivotal role as the “new oil” in the context of the evolving global energy landscape.
In conclusion, as the world races towards a sustainable energy future, lithium has emerged as the “new oil,” powering the transition to Electric Vehicles and renewable energy storage. While lithium may reshape the landscape of road transportation, it’s essential to acknowledge that oil will retain its essential role across a spectrum of industries.

According to a white paper by NASA, electric vertical takeoff and landing (eVTOL) aircraft leverage the benefits of Distributed Electric Propulsion (DEP) and include electric and hybrid propulsion options. These aircraft have the potential to improve the future of elevated mobility by moving people and cargo more quickly, quietly, and cost-effectively than traditional helicopters. If it is ensured that, electric flying vehicles are a safe, affordable, and sustainable way to travel, another demand stream for lithium could open up in the short distance aviation/mobility sector.
By 2050, 78% of all vehicles worldwide will be EVs. Electricity is one third of energy demand in road transport but will power 80% of the global fleet. This will contribute to a significant displacement of oil and other hydrocarbons from the energy system. Subsequently, the demand of lithium will continue to rise for the foreseeable future.

Upstream, there are some large companies such as Ablemarle and Pilbara Minerals surrounded by hundreds of entrepreneurial explorers and developers with players such as Vulcan Energy, Latin Resources, Sigma Lithium (now a producer) and others. Lithium can be found all over the world, however the ‘Lithium Triangle’ containing the most dominant sized resources is in Latin America.
As the market grows, even International Oil Companies such as Exxon are getting involved in the lithium extraction business. Downstream it is the large vehicle companies such as Stellantis, BYD, Ford and Tesla that are signing contracts to offtake refined lithium carbonate.
One thing is certain; the future is an electrified future and we can expect further advancements in materials and technology to propel further human development, on this planet and further into space.
Check Other Posts: Artificial Intelligence (AI) Opportunities