The United States has confirmed lithium resources that can meet its domestic demand for lithium-ion batteries for decades. However, most US lithium resources are considered “unconventional” which means that we have to scale up proven next generation technologies and build out a domestic ecosystem development to achieve competitive economics with leading resources globally.
While several lithium-producing countries have free trade agreements with the US, they generally lack midstream capacity to turn lithium into battery-grade materials. Many of their projects are also dependent on Chinese investment or offtake, which may present challenges for 30D tax credit compliance as foreign entity of concern (FEOC) provisions take effect.
The US should build out its own lithium industry, including extraction, midstream processing, and recycling to provide sufficient supply to meet domestic lithium-ion battery demand. Beyond tax credit implications, these investments would promote American technology leadership in a rapidly growing segment of the global energy sector and ensure supply chain resilience against foreign threats. The US could produce enough battery-grade lithium for itself – and for export to allies – by 2035, by unlocking a diverse set of resources across multiple regions.
The US should target production of 1,000,000 metric tons of battery-grade lithium annually by 2035, and enable that scale-up through financing support for first-of-a-kind projects, investment in direct lithium extraction (DLE) RD&D, and regional ecosystem development.
Production capacity will be limited through 2027, when the first major DOE-backed projects begin their ramp up. First-of-a-kind (FOAK) projects will continue to deliver through the end of the decade, after which production from domestic resources will rapidly scale and match demand. Accelerated growth in the mid-2030s will result primarily from brine resource development, with strong ecosystem development and entry by more mature petrochemical producers.
Figure 1 illustrates this expected ramp-up over the next decade.
NOTE: Production figures in this roadmap are based on public announcements from project developers, with timing and volumes estimated from project progress to date, resource competitiveness, and scalability. Recycling volumes are estimated from end-of-life battery availability.
The United States will need to exploit three primary lithium resources to reach 1,000,000 MT per annum: 1) spodumene (hard rock), 2) brines and clays, and 3) lithium-ion battery recycling.
Spodumene: US resources are primarily concentrated in the Charlotte, NC region, and feature lower lithium concentrations than top-tier competing resources in Australia and Canada. Spodumene ore processing is a mature technology and low-risk relative to extraction of other domestic lithium resources. Commodity prices and local environmental opposition are the primary barriers to bringing US production online.
The most advanced domestic resource is Albemarle’s Kings Mountain mine, which at full production is expected to produce 50,000 tonnes per annum (tpa) of lithium carbonate equivalent (LCE) and supply its “Megaflex” processing facility in Chester County, SC. Producers like Albemarle and Piedmont Lithium can supplement their domestic resources with foreign feedstocks from Australia and Canada for economies of scale and increase domestic production of battery-grade lithium.
Domestic spodumene can comprise between 100,000-150,000 tpa LCE by 2035.
Brines and Clays: The US has significant brine and clay resources, concentrated primarily throughout Nevada, California’s Imperial Valley, and the Arkansas Smackover. Most resources identified to date have lower lithium concentrations and greater impurities than their South American competitors, which has left most of them struggling to attract financing in the current price environment. Project developers have turned to a suite of technology solutions collectively termed direct lithium extraction (DLE) to increase processing efficiencies and improve operating economics.
Certain resources, such as Nevada’s Rhyolite Ridge (boron) and Smackover (bromine) contain high concentrations of other recoverable materials that improve overall economics. Many of these resources are highly scalable, such as Nevada’s Thacker Pass and California’s Salton Sea, producing anywhere from 50,000 tpa to more than 100,000 tpa LCE annually each. However, most will require scaling proven technology in DLE, as well as well as supply chain development to lower operating costs and improve competitiveness.
The scalability potential of DLE technologies and similarities with the petrochemicals sector have drawn interest and investment from major oil and gas players. These firms, which include Exxon-Mobil, Koch, SLB, and Occidental, bring the capital and engineering expertise needed to rapidly scale production after FOAK projects are operational.
Maturity in DLE would also allow rapid deployment by project developers licensing the technology across multiple smaller resources, who would then send their intermediate lithium product to larger lithium refiners for processing into battery grade product. Produced water from fracking operations also may hold meaningful quantities of lithium. As with spodumene, intermediate lithium products from South American brines can supplement domestically-extracted lithium at midstream refineries to increase domestic production of battery-grade product.
Brine and clay resources have the greatest but most unpredictable scaleup potential, which will depend on multiple technology, supply chain, and demand variables. These resources could produce 500,000 to 1,000,000 tpa LCE by 2035.
Recycling: Multiple lithium-ion battery recyclers are growing their vertically-integrated operations to support closed-loop battery manufacturing. Most of their feedstock is manufacturing scrap from battery gigafactories, supplemented by some end-of-life batteries from consumer electronics. End-of-life EV batteries are not expected to comprise a significant share of recycling feedstock until the mid-to-late 2030s. However, federal support for scaling and sustaining these operations will reduce domestic demand for lithium extraction and increase processing of battery-grade lithium as more batteries begin reaching end-of-life.
Recycling can comprise between 50,000-100,000 tpa LCE by 2035, depending on end-of-life EV battery volumes available. These figures exclude recycling from manufacturing scrap.