According to data compiled by Deutsche Bank Markets Research, it is projected that the global lithium demand will increase from 181kt Lithium Carbonate Equivalent (LCE) in 2015 to 535kt LCE by 2025.

The emergence of electric vehicles (EVs) and energy storage markets is expected to drive the lithium market due to demands for lithium-ion batteries. Global battery consumption is expected to increase five times by 2025, placing high demands on the lithium market and its supply chain, especially cobalt.

Wood Mackenzie forecasts the demand for cobalt in electric vehicles to grow four-fold by 2020 and eleven-fold by 2025.

The increasing demand for both lithium and cobalt is attributable to portable consumer electronic devices such as phones or laptops. But as EVs become more accessible and auto manufacturers shift to more environmentally friendly options, it is forecasted for EVs to be the largest contributor to both the lithium and cobalt markets. A report by Business Insider quoted a commodity-focused fund manager: "Future demand for cobalt from the EV (electric vehicle) sector is looking tangible and is more positive than originally expected. China has some aggressive plans in terms of electric vehicles. It will be a major driver behind cobalt consumption growth."

In September of last year, VW Group asked producers to submit proposals on supplying the material for up to ten years from 2019.

Battery and auto manufacturers need to sign multi-year deals to secure supplies of raw materials including cobalt and lithium, analysts maintain.

VW Group CEO Matthias Müller has made reference to the importance of key components such as batteries and procurement initiatives taking place. "We also won't let the issue of batteries be taken out of our hands," said Müller in September of last year at the IAA. The company will need a battery capacity of more than 150 GWh a year by 2025 solely to fit its own e-fleet with lithium-ion batteries. To cater for that enormous demand, the Volkswagen Group has initiated an invitation to tender for long-term strategic partnerships for China, Europe and the United States. "We're talking here about one of the largest procurement projects in our industry's history, one with a global order volume of more than EUR50bn over its term," said Müller.