Wood Mackenzie warns in a new report that the global lithium market could face a supply shortfall by the end of the decade, with implications extending beyond electric vehicle batteries to the lubricating grease sector.
The consultancy expects current oversupply conditions to persist through 2027, weighing on prices and margins for higher-cost producers. However, tightening supply-demand balances are projected to emerge around 2028–2029 as EV demand accelerates.
Estimates suggest that up to 8.5 million metric tons of lithium carbonate equivalent in additional supply will be required by 2050. Total demand could reach between 5.6 million and 13.2 million tons over the same period, driven largely by vehicle battery applications. Around 85% of lithium consumption is currently accounted for by rechargeable batteries.
For grease manufacturers, the outlook raises longer-term concerns. Lithium-based thickeners are the dominant grease formulation. Sustained price increases or supply disruptions would affect production costs and availability.
“If I were a betting man, I would say it could only get worse,” Dennis Eijdenberg, technical manager at Interflon, a specialist lubrication manufacturer and supplier, told Lube Report. “There aren’t too many positives when it comes to lithium – availability-wise, price-wise, as well as the willingness of the market to work with [alternative] materials.”
Lithium consumption from the grease sector is modest compared with batteries, and producers compete for the same upstream raw materials. Instead of contracts, grease makers buy at spot prices, Eijdenberg explained.
At the same time, regulatory developments are adding more uncertainty for producers of this “jack-of-all-trades” grease. The European Union is evaluating potential restrictions on certain lithium compounds used in grease formulations as part of REACH, according to industry sources. Any such measures could require reformulation or accelerate the shift toward alternative thickener chemistries, including calcium sulfonate and polyurea.