Insufficient supply of raw materials such as lithium, power batteries will once again set off a wave of price hikes

A few days ago, overseas media reported that the price of electric vehicle batteries may rise in 2022 after 10 years of sharp declines as the supply of lithium and other raw materials cannot meet the expanding demand.

The benchmark price for lithium carbonate hit a record in late 2021, even as mining companies scrambled to increase output from existing facilities and develop new sources of supply. In China, the world's largest battery producer, the price of batteries was 261,500 yuan ($41,060) per ton, more than five times higher than in January last year.

The most expensive component in each battery is the cathode, and prices for other commodities used in cathode batteries are also rising: cobalt has doubled since January to $70,208 a tonne, and nickel has risen 15 percent to $20,045 per ton.

In recent years, automakers and battery makers have struggled to develop long-life, high-performance batteries while also trying to reduce costs, and rising battery prices are undermining progress in these technologies and efficiencies. They could also hamper the auto industry's ambitious electrification plans, just as previously reluctant companies such as Toyota have also begun to implement EV production targets.