Lithium is a central raw material for the electric mobility transition, as it is an indispensable key component in batteries for electric vehicles. Europe has recognized that securing its own lithium supply is essential to benefit from the global energy transition and to reduce dependencies on imports – particularly from China.
Current Market Developments and Strategies in Europe
- The EU is pursuing ambitious goals by 2030 with the Critical Raw Materials Act (CRMA): 10% of the annual lithium demand is to be mined within Europe, 40% processed, and 25% recycled. This aims to help increase supply security and cushion price fluctuations due to geopolitical risks.
- An example project is the mining initiative at Cínovec on the Czech-German border. It is estimated that three to five percent of the world’s lithium reserves are located there. The company Geomet plans to create an environmentally friendly production chain from mining to the production of lithium carbonate – an important battery raw material.
- Despite these initiatives, there are significant challenges: Europe is lagging in investments. While China invested approximately six billion US dollars in lithium-related projects abroad between 2020 and 2023, Europe spent less than one billion US dollars. This funding gap hampers the expansion of domestic capacities.
- Recycling plays an increasingly important role in Europe’s strategy to reduce raw material dependence. However, currently, less than one percent of lithium is recycled – there is substantial growth potential in this area.
Importance for Private Investors and Small Investors
- The increasing demand for lithium due to the boom in electric cars and government subsidy programs creates attractive long-term growth opportunities in the European lithium sector.
- As many projects are still at the beginning or under development (e.g., new mines or processing facilities), early investments could potentially offer high returns before widespread market interest emerges.
- However, such investments are also associated with risks: high capital requirements, regulatory uncertainties, and competition from established international players such as China can delay or increase development costs.
Conclusion
European policy is actively promoting the establishment of its own lithium-based value chain to achieve strategic independence. For private investors, there is currently an interesting opportunity to enter this growth market early — before the topic receives broader attention and stock prices may rise. Nevertheless, investors should consider the existing challenges such as investment gaps and geopolitical competition.