Highly accurate diffusion quantum Monte Carlo (QMC) studies of the adsorption and diffusion of atomic lithium in AA-stacked graphite are compared with van der Waals-including density functional theory (DFT) calculations. Predicted QMC lattice constants for pure AA graphite agree with experiment. Pure AA-stacked graphite is shown to challenge many van der Waals methods even when they are accurate for conventional AB graphite. Highest overall DFT accuracy, considering pure AA-stacked graphite as well as lithium binding and diffusion, is obtained by the self-consistent van der Waals functional vdW-DF2, although errors in binding energies remain. Empirical approaches based on point charges such as DFT-D are inaccurate unless the local charge transfer is assessed. The results demonstrate that the lithium-carbon system requires a simultaneous highly accurate description of both charge transfer and van der Waals interactions, favoring self-consistent approaches.