Lithium prices skyrocket, posing headache for electric vehicle manufacturers

Lithium prices are skyrocketing worldwide, driving up the cost of electric vehicle manufacturing at a moment when car developers are re-orienting huge portions of their output to developing EVs.

Lithium "hit a fresh record of 500,500 yuan ($71,315) a ton in China Friday, according to data from Asian Metal Inc," Bloomberg reported this week.

That represents roughly a tripling of lithium prices in that country over the past year. Disruptions to the electric grid in Sichuan—where one-fifth of China’s lithium processing takes place—have contributed to the soaring prices. 

Doug Mehl, an analyst with consulting group Kearney, told Yahoo News that the price spike is "a result of constrained supply and should be rather temporary as additional supply comes on board." He argued, however, that supply issues may persist in the near future. 

"Lithium itself isn’t rare (25th most abundant element)," he told the news service, "but the industry needs more mining and processing capacity. We see a significant supply shortage by the end of the decade."