Lithium demand from stationary battery energy storage systems surged 51% in 2025, with global BESS installations reaching as much as 421 GWh and installed capacity rising 65.8% to 301.7 GW. Albemarle projects BESS will account for 30% of global lithium demand in 2026, rising to 36% by 2030, while Benchmark Mineral Intelligence forecasts new operational capacity exceeding 450 GWh this year. The structural shift, accelerated by AI data centre power demand and LFP chemistry economics, is rewriting the demand architecture that lithium markets have relied upon for a decade.
Introduction
For the better part of a decade, the lithium market operated on a singular demand thesis: electric vehicles would drive consumption higher, and everything else was secondary. That thesis is now structurally incomplete. Battery energy storage systems (BESS) recorded demand growth of 51% in 2025, roughly double the 26% growth rate recorded by the EV sector in the same period, according to Benchmark Mineral Intelligence. The numbers describe a market in structural rebalancing, not a temporary cyclical surge.
Global lithium-ion battery demand reached 1.59 TWh in 2025, a 29% year-on-year increase, according to Benchmark Mineral Intelligence. Within that aggregate, BESS was the fastest-growing segment by a significant margin, and its share of total battery demand has been rising consistently. EVs represented 75% of global battery demand in 2025, down from 77% in 2024 and 79% in 2023. The directional shift is gradual but sustained, and the compound trajectory points toward a market structure that looks fundamentally different by the end of the decade.
The implications extend well beyond the demand mix. As I explored in my September 2026 analysis of energy storage as lithium's second demand pillar, this shift is now visible in pricing, in cathode chemistry selection, and in how producers are rebuilding their market narratives to investors. What has changed in the weeks since is that the data confirming this structural argument has continued to accumulate, and major producers are now quantifying their exposure with a precision that was not previously available.
The Scale of the 2025 Storage Build: Installation Data Across Sources
The headline installation figures for 2025 vary depending on methodology and scope, but every major data provider points in the same direction. InfoLink Consulting recorded 275.3 GWh of energy storage system installations in 2025, a 61.3% increase from the prior year. Benchmark Mineral Intelligence placed the figure at approximately 315 GWh across grid-scale and behind-the-meter markets, representing nearly 50% year-on-year growth. A broader shipment figure from industry data reaches 421.2 GWh when accounting for all BESS shipments, with 600 GWh projected for 2026.
The IEA's data provides a capacity-based frame for these volume figures. In 2025, 108 GW of new battery storage capacity was deployed worldwide, 40% more than in 2024. Installed capacity is now eleven times higher than it was in 2021. Global battery energy storage capacity surged to 301.7 GW in 2025, a 65.8% increase from 2024 and approximately 158 times the 1.9 GW that was installed globally in 2015. A single year, 2025, added nearly 120 GW of new capacity.
The project scale metrics are equally telling. Forty-six giga-scale projects entered operation in 2025, up from 17 in 2024. The pipeline for 2026 already contains more than 150 giga-scale projects. Around 80% of new battery capacity added in 2025 was utility-scale, reinforcing the structural rather than distributed character of the growth. This is not residential storage filling gaps in consumer markets; it is industrial and grid-scale procurement operating on capital expenditure timelines measured in years, not quarters.
China continued to dominate the geographic distribution, accounting for approximately 60% of global additions, with 167 GWh of new capacity in 2025 and projections of 203.5 GWh in 2026. The United States added 52.1 GWh in 2025, closing the year with a record 57.6 GWh total across the full calendar year and bringing cumulative grid-scale capacity to 137 GWh. Saudi Arabia, effectively absent from league tables two years ago, deployed approximately 11 GWh in the first quarter of 2025 alone, reaching third place globally and displacing the UK and Italy from positions they had held in 2024.
Producer Positioning: Albemarle and Liontown Quantify the Structural Shift
The clearest signal that stationary storage has graduated from a secondary narrative to a primary investment thesis comes not from analysts but from the producers themselves. Albemarle, the world's largest lithium producer, estimated that lithium consumption for energy storage increased by as much as 90% year-on-year to 380,000 metric tonnes in 2025. In North America specifically, energy storage growth reached 145% year-on-year through September, a figure that CEO Kent Masters connected explicitly to data centre and AI infrastructure investment.
"We expect lithium demand for stationary storage applications to increase more than 2.5 times by 2030," Masters said on a November 2025 earnings call, framing North America as the fastest-growing region for stationary storage at nearly 150% growth year-to-date and attributing the momentum to "rising data center and AI investment in the United States" increasing demand for electricity and grid stability. The company projects BESS will account for approximately 30% of global lithium demand in 2026, a figure that aligns with J.P. Morgan's independent estimate of the same proportion, rising to 36% by 2030 in that bank's modelling.
Liontown Resources, whose Kathleen Valley project in Western Australia commenced production in April 2025 and is on track to reach a 1.5 million tonnes per year run-rate by the end of March 2026, has also made BESS demand a central element of its investor communication. Grant Donald, Liontown's Chief Commercial Officer, highlighted in an October 2025 earnings call that the spread between high and low estimates of lithium demand from BESS alone spans more than 765,000 metric tonnes of lithium carbonate equivalent, approximately half the total size of the lithium market in 2025. CEO Tony Ottaviano described stationary storage as "a significant second engine" for demand, and Fastmarkets data cited by the company projects BESS demand could triple by 2030, potentially absorbing planned production increases from new Australian projects. Ganfeng Lithium's chairman separately projected a 30 to 40% increase in global lithium demand for 2026, with lithium carbonate prices potentially reaching 200,000 yuan per tonne.
These producer statements matter beyond their headline numbers. Albemarle has simultaneously tightened capital spending, idled higher-cost assets, and divested non-core operations, actions that are consistent with a company confident that demand is coming to meet its supply rather than the reverse. The investment thesis being communicated to capital markets has shifted from volume-at-any-cost to disciplined positioning for a demand cycle anchored in storage, not solely in automotive.
AI Data Centres: The Unexpected Demand Accelerant
The role of artificial intelligence infrastructure in reshaping lithium demand was not a material factor in market models written before 2024. By 2025, it had become one of the most consequential structural forces operating on the storage side of the equation. Battery-based uninterruptible power supplies, primarily installed in data centres, saw capacity additions rise 30% to 45 GW in 2025, according to IEA data. The IEA also projects that global data centre electricity consumption will roughly double to approximately 950 TWh by 2030, approaching 3% of worldwide electricity demand.
Benchmark Mineral Intelligence has quantified the lithium demand trajectory from this segment with precision. Demand from AI data centre energy storage is forecast to rise from approximately 15,000 tonnes in 2025 to nearly 70,000 tonnes by 2035. In North America, AI data centre power expansion could translate into approximately 160 GWh of battery storage requirements, according to industry research, with LFP chemistry expected to maintain technological dominance in this segment. The U.S. market is experiencing the most acute version of this dynamic: after more than a decade of stagnant power demand, consumption is rising again, driven by data centres, electrification, and reshoring of manufacturing.
Iola Hughes, Head of Research at Benchmark Mineral Intelligence, has noted that in the US specifically, storage is on a trajectory to make up 35 to 40% of total battery demand within the next few years, a proportion that reflects the concentration of AI infrastructure investment in that market. The structural durability of this demand source is a critical distinction from automotive demand. Unlike vehicle batteries, which are sensitive to consumer confidence, financing costs, and policy incentives, data centre battery procurement operates on multi-year capital expenditure programmes driven by technology companies and utilities. Once committed, these programmes are rarely reversed on short timelines. Demand for storage batteries surged 51% in 2025, approximately double the growth rate recorded for EV batteries, and the data centre component of that figure is directionally increasing rather than moderating.
UBS has projected what it characterises as a "boom cycle" in global energy storage demand over the next five years, with demand potentially surging 40% year-on-year by 2026 as AI data centres drive the need to balance variable renewables against concentrated and predictable load. The combination of renewable intermittency and AI baseload demand creates a structural requirement for storage that is independent of consumer behaviour, a quality that makes the demand category analytically distinct from anything that has previously anchored lithium markets.
LFP Chemistry, Price Dynamics, and the Divergent Analyst Views on 2026
The technology underpinning the storage demand surge is overwhelmingly lithium iron phosphate. LFP now accounts for around 90% of BESS deployments, according to the IEA's Global Critical Minerals Outlook 2026, up from well below 50% market share just five years ago. LFP demand rose 48% year-on-year in 2025, the fastest growth rate of any major battery chemistry. Hughes described LFP as "the best chemistry" for most storage applications, citing its lower cost, better suitability for frequent cycling, and recent improvements in energy density that have narrowed its historical disadvantage relative to nickel-rich chemistries in higher-performance applications.
The chemistry choice has direct consequences for lithium price dynamics and specifically for lithium carbonate, which is the relevant feedstock for LFP production rather than lithium hydroxide, which is more commonly associated with nickel-rich cathodes. Lithium carbonate prices at the CIF China assessment point fell to as low as approximately $7.50 to $8.60 per kilogram in June 2025, following a period of structural oversupply that saw a surplus of approximately 141,000 metric tonnes of LCE in 2025. The subsequent rally, driven in significant part by stronger-than-expected BESS demand and depleted inventory levels in China, pushed assessments to a year-to-date peak of $24.50 to $25.80 per kilogram on May 12, 2026, a 212% move from the June 2025 trough. Raju Daswani, CEO of Fastmarkets, characterised this transition plainly: "The period of market overcorrection is over. Energy storage has become a primary driver of growth in this market."
Not all analysts share the same 2026 outlook, and the divergence is material. S&P Global Energy CERA projects a 3.0% year-on-year decline in lithium demand from energy storage in 2026, to 209,000 metric tonnes, citing expectations of fewer energy storage installations globally. Sam Wilkinson, head of renewables markets at Sustainable1, attributed this to the Chinese market specifically, where the removal of a mandate requiring energy storage to be paired with new large-scale solar installations is expected to reduce deployment. China accounted for over 60% of global installations in 2025, so a policy-driven softening in that market is not a minor counterpoint. S&P Global data projects global battery storage installations declining 2.7% to approximately 296,617 MWh in 2026 from 304,978 MWh in 2025. This view sits in direct tension with Benchmark Mineral Intelligence's forecast of more than 450 GWh of new operational capacity in 2026, and with J.P. Morgan's projection of 43% growth in stationary storage battery shipments for the same year. Seth Goldstein of Morningstar described BESS as set for "mid-double-digit growth in 2026" and characterised it as "the fastest growing lithium demand source." The spread between the most bearish and most bullish 2026 projections is not a rounding error; it is structurally significant, and it maps directly onto the demand uncertainty that Liontown's Grant Donald described as spanning 765,000 metric tonnes of LCE.
Long-Term Structural Outlook: From Second Pillar to Co-Equal Driver
The long-term trajectory of storage demand, regardless of the precise 2026 outcome, points consistently toward a structural reweighting of the lithium demand mix. Fastmarkets analysts project global energy storage installations rising approximately 25% per year over the next decade, reaching nearly 800 GWh by 2030 and more than 1,600 GWh by 2035. GlobalData projects global battery energy storage capacity expanding sixfold between 2025 and 2030 at a 42% compound annual growth rate. The IEA's Net Zero Emissions scenario requires battery storage to rise 14-fold to 1,200 GW by 2030 to facilitate renewable energy integration, with battery storage delivering 90% of total storage growth in that scenario.
The IEA's own baseline scenario projects global lithium demand growing 146% between 2024 and 2030, driven by EVs and energy storage combined. Total lithium consumption is expected to increase from approximately 1.3 million metric tonnes of LCE in 2025 to nearly 4 million tonnes by 2035. Against that consumption trajectory, the IEA has separately flagged a 40% lithium supply shortfall in 2035 under current policies, a figure that becomes more acute if BESS demand tracks the upper end of the range rather than the midpoint. S&P Global forecasts the 2026 lithium surplus narrowing from 141,000 metric tonnes LCE to 109,000 metric tonnes, setting up conditions for potential price recovery by late 2026 if demand accelerates as Benchmark and J.P. Morgan project.
The investment flowing into storage infrastructure confirms the demand signal. Investments in battery storage and power grids globally were estimated to have surpassed $450 billion in 2025. The stationary battery storage market was valued at $24.3 billion in 2025 and is projected to reach $72.2 billion on current growth trajectories. Benchmark Mineral Intelligence's Hughes noted that there should be no material supply constraint on BESS-grade cells in the near term, with cell production outpacing installed capacity growth, but the lithium carbonate feedstock picture is more nuanced, particularly if the supply-side disruptions documented through 2026 persist into the period when storage demand reaches critical mass.
Forecasts from RMIS and CarbonCredits suggest that without significant new mining capacity commitments, the market could shift from surplus to structural deficit by 2029, a timeline that coincides with peak projected adoption rates for both EVs and stationary storage. The competition for supply between two co-equal demand segments, each with structurally different price sensitivity and procurement behaviour, represents a market dynamic that has no direct historical precedent in the lithium industry. What is now clearly established is that stationary storage is not a secondary demand story hedged against EV growth; it is an independent structural pillar, growing on its own momentum and reshaping the market architecture that underlies lithium's pricing, its supply incentives, and its long-term investment calculus.
Conclusion
The data compiled across every major provider through September 2026 supports a single structural conclusion: energy storage has become a co-equal demand driver in the lithium market, not a supplement to the automotive thesis that has dominated the industry for a decade. BESS demand grew at roughly double the rate of EV demand in 2025. Installed capacity surpassed 300 GW. Albemarle quantified a 90% surge in lithium consumption for storage applications. Benchmark Mineral Intelligence projects more than 450 GWh of new operational BESS capacity in 2026. The LFP chemistry that underpins virtually all of this deployment is the same chemistry whose feedstock, lithium carbonate, staged a 212% price recovery from its June 2025 trough.
The S&P Global counterpoint, that China's policy reversal on solar-pairing mandates could produce a modest 2026 installation decline, is a legitimate risk to the growth trajectory, particularly given China's 60-plus percent share of global installations. It does not, however, alter the structural direction. North American demand is accelerating on AI data centre and grid stability dynamics. Middle Eastern markets have moved from zero to material scale in under a year. The project pipeline for 2026 contains more than 150 giga-scale projects globally. These are not signals of a demand category subject to reversal on a one-year policy change in a single market.
The harder question, which the supply-side data beginning to emerge through mid-2026 will be necessary to resolve, is whether the capital investment required to match this demand trajectory has been committed in time. The IEA's projection of a 40% supply shortfall by 2035 under current policies, combined with the 40% collapse in lithium sector capital investment in 2025 documented by the same agency, describes a supply side that is structurally underinvesting relative to a demand side that is structurally accelerating. That tension does not resolve itself through price signals alone. It requires sustained, long-lead capital deployment, and the window for that deployment, measured against 2029 to 2030 demand ramp targets, is narrowing.