--- title: Lithium Is Key to the EV Transition—And It's in Short Supply description: Lithium prices are up 400%. Experts say the supply will get worse before it gets better, with implications for the electric vehicle market. canonical: https://time.com/6182044/electric-vehicle-battery-lithium-shortage/ author: Emily Barone article:opinion: false article:content_tier: free article:published_time: 2022-05-26T21:23:35.000Z article:modified_time: 2026-02-24T14:18:47.765Z article:section: Climate og:title: Lithium Is Key to the EV Transition—And It's in Short Supply og:description: Lithium prices are up 400%. Experts say the supply will get worse before it gets better og:url: https://time.com/6182044/electric-vehicle-battery-lithium-shortage/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/bltde093bcdab65f2d0/6988d9b9bc6cfc69913e2a3c/time-logo.jpg?branch=production og:image:width: 1200 og:image:height: 675 og:image:alt: TIME og:type: article twitter:card: summary_large_image twitter:title: Lithium Is Key to the EV Transition—And It's in Short Supply twitter:description: Lithium prices are up 400%. Experts say the supply will get worse before it gets better twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/bltde093bcdab65f2d0/6988d9b9bc6cfc69913e2a3c/time-logo.jpg?branch=production --- # Lithium Is Key to the Electric Vehicle Transition. It's Also in Short Supply > Sponsored content. Supplied in partnership with TIME. 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Future Proof is TIME's weekly climate and energy newsletter, written by senior correspondent Justin Worland. It connects the energy transition to the decisions reshaping business, technology, policy and markets. #### Where can I follow the energy transition as a business story? Future Proof covers climate and energy as an economic and business story rather than only an environmental one. It publishes every Friday and is free at time.com/newsletters. #### Who writes Future Proof? Justin Worland, a senior correspondent at TIME and an award-winning climate journalist, writes Future Proof. #### Is Future Proof free? Yes. Future Proof is free at time.com/newsletters. by [Emily Barone](https://time.com/author/emily-barone/) ## Emily Barone May 26, 2022 9:23 PM UTC by [Emily Barone](https://time.com/author/emily-barone/) ## Emily Barone May 26, 2022 9:23 PM UTC Lithium, an element that you may not have thought about since high school chemistry class, has been making headlines recently. This lightweight substance is a critical component in rechargeable lithium-ion batteries, which are used in most personal electronics and electric vehicles. And in the last year, it’s gotten expensive. The price for lithium carbonate—the compound that gets extracted from the ground—has [shot up 432%](https://www.benchmarkminerals.com/) year over year, hitting nearly $62,000 per metric ton in April. In the six years prior, for comparison, it averaged around $11,000\. The price spike is due to the booming electric vehicle market, which is putting demand pressure on battery producers, which in turn puts demand pressure on the minerals suppliers. While the Earth has plenty of lithium to go around, the supply needs to be extracted from brine pools and underground reserves, and current mining operations aren’t sufficient to keep up with the auto industry’s growing needs. “The electric vehicle market has blown away expectations of deployment over the last years,” says Morgan Bazilian, director of the Payne Institute for Public Policy at the Colorado School of Mines. “Therefore, we see that the lithium-ion battery is in the midst of a transition from something that’s niche to something that’s absolutely mainstream for technology in the 21st century.” Bazilian adds that the seeds of today’s market stresses were planted well before the recent demand for electric vehicles. While manufacturers have poured years’ worth of time and research dollars into developing vehicles that the public will buy, there wasn’t the same urgency downstream, particularly because lithium mining takes massive investment and the payoff for such investment was uncertain. (Lithium prices did go up in 2016 and 2017, spurred by the excitement around electric vehicles and a few hints of demand, such as a growing [market for electric buses](https://cleantechnica.com/2017/02/25/china-electric-buses-still-exploding/) in China at that time. But then they tapered off—and so, too, did investment.) “We are starting to see action in those areas—from all the minerals that go into the batteries, through the manufacturing of those batteries, and into the cars,” Bazilian says. “But it takes a lot of time for a new mine or a new processing plant to be put online.” --- **_A version of this story first appeared in the_** **Climate is Everything** **_newsletter. To sign up,_** [**_click here_**](https://cloud.newsletters.time.com/newsletters/?newsletter%5Fname=climate&source=onsite)**_._** --- Indeed, hard-rock mines require three-to-five years to get up and running, while brine projects can take seven years, according to a 2019 [analysis from S&P Global](https://www.spglobal.com/en/research-insights/articles/lithium-supply-is-set-to-triple-by-2025-will-it-be-enough) that ominously forecasted that lithium demand would outweigh supply. Experts like Caspar Rawles, chief data officer at Benchmark Mineral Intelligence, says that the seven years it takes from discovery to production is more than twice as long as the time it takes to set up other parts of the supply chain, like battery plants. **Read More:** [Why Tesla CEO Elon Musk Is Calling ESG a ‘Scam’](https://time.com/6180638/tesla-esg-index-musk/) “We refer to this as the ‘great raw-materials disconnect’,” says Rawles. “The investments that happen today are going to pay dividends later in the decade, but it takes a while to get there.” In the meantime, he predicts, lithium prices will continue to climb until more of the stuff gets extracted, creating a market deficit that could last through to the second half of this decade. What’s worse, those prices will compound the effects of other stressors—like inflation, rising labor costs, supply-chain bottlenecks, and other raw material price spikes—that are hitting auto manufacturers hard. Already, automakers are responding by[ raising electric vehicle prices](https://www.cnbc.com/2022/05/21/electric-vehicle-prices-rise-at-tesla-rivian-gm-and-other-carmakers.html). That’s contrary to a typical market cycle, where prices drop as more competition enters the market. Increasingly expensive price tags may put battery-powered vehicles further out of consumers’ reach— conceivably hampering the transition away from carbon-emitting combustion engines. “Lithium has stood out because it’s seen the biggest increase in percentage terms. And automakers are fully exposed to those price swings because there is no hedging mechanism at the moment—they can’t hedge \[lithium\] prices like they can for steel, or aluminum, or other products that they use commonly,” says Rawles. “I think, if it was just lithium \[getting more expensive\] and everything else had stayed the same, it would be much more manageable for automakers. 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