Electric vehicle prices could further rise in 2022 as the supply of lithium carbonate, a key ingredient in battery making, struggles to keep up with the sharp rise in demand.
What Happened: Benchmark price of lithium carbonate soared to a new high in 2021 and price in China was just over $41,060 a ton, which is more than five times higher than last January and above previous records, Nikkei Asia reported.
China is the world’s biggest battery-producing nation.
Prices of other commodities that go into battery making for electric vehicles have been rising as well. Cobalt prices have doubled since last January to $70,208 a ton, while nickel jumped 15% to $20,045.
See Also: Tesla, Nio Supplier CATL To Invest $2.1B In New Lithium Battery Project
Lithium carbonate supply is expected to reach 636,000 metric tons this year, up from an estimated 497,000 metric tons in 2021, the report noted — citing S&P Global Market Intelligence, adding that both demand and supply are climbing higher.
Why It Matters: Electric vehicle makers, as well as legacy automakers, across the globe, are rushing to secure battery supplies as they set steep targets.
Tesla Inc (NASDAQ:TSLA), the global electric vehicle leader, crushed delivery estimates for 2021 and is expected to see a further jump in capacity this year as it starts operations at Giga Texas and Giga Berlin.
Ford Motor Co. (NYSE:F) is pumping $30 billion into electrification efforts by 2025. The automaker in September revealed an $11.4 billion plan to build two new battery factories in a joint venture with South Korea's battery maker SK innovation. The project is expected to add 11,000 jobs.
See Also: Tesla, NIO Partner CATL Also Has A 'Business Relationship' With Ford
The automaker expects 40% to 50% of its global vehicle volume to be fully electric by 2030.
Volkswagen Group (OTC:VWAGY) and General Motors Co (NYSE:GM) have set similar targets.
Price Action: Tesla shares closed 1.3% lower at $1,056.8 a share on Friday.
