Chart: Lithium prices are through the roof this year

What will record-high lithium costs mean for lithium-ion batteries, which are key to electric vehicles and grid energy storage?
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Canary Media’s chart of the week translates crucial data about the clean energy transition into a visual format. Canary thanks Natural Power for its support of this feature.

We’re living in a battery materials world.

Lithium-ion batteries have powered consumer electronics and the smartphone revolution for years. But now that electric vehicles are starting to take significant market share from gas-powered cars, battery demand has shifted into even higher gear.

As this chart shows, prices of lithium carbonate, the commodity that puts the lithium in lithium-ion batteries, have shot to the moon this year. It’s impossible to look at that trajectory without wondering what will become of the movement to shift transportation and a growing portion of the electrical grid to run on batteries.

The key thing to remember is that prices reflect current supply and demand, not the actual supply of lithium in the world. Today’s mining output reflects investments made years before it was clear that electric vehicles would take the auto industry by storm. The obvious antidote to skyrocketing prices is to mine more lithium.

But that takes time, and it requires material intervention in the landscape. Recycling batteries won’t meaningfully help supply anytime soon because the pool of old EV batteries is just a drop in the ocean of future need.

Over the last decade, lithium-ion battery prices kept falling and falling. Continued declines acquired the aura of natural law. But pandemic-related supply-chain disruptions for all sorts of materials and commodities hit the battery industry just like everybody else, at a time when demand for batteries specifically reached new highs. A prolonged shortage of battery ingredients could slow the industry just when it’s poised to take off.

It’s in a lot of people’s interest to make sure that doesn’t happen. Tesla CEO Elon Musk tweeted last month about lithium prices hitting insane levels,” saying that Tesla might actually have to get into the mining & refining directly at scale, unless costs improve.” It was an odd revelation from someone who told the world back at his Battery Day” in 2020 that he’d acquired mining rights to a 10,000-acre lithium deposit in the U.S.

Perhaps the stratospheric jump in lithium prices will spur Musk and his peers to action on this long-simmering to-do-list item.


Natural Power is a global consultancy that supports its clients to deliver a wide range of renewable energy projects. Its independent engineering experience covers all phases of the project lifecycle, from feasibility through construction to operations, and all stages of the transaction. Learn more.

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Julian Spector is a senior reporter at Canary Media. He reports on batteries, long-duration energy storage, low-carbon hydrogen and clean energy breakthroughs around the world.

Maria Virginia Olano is chief of staff at Canary Media.