Lithium prices have more than quadrupled over the last year as the rush from automakers to produce electric vehicles gains momentum. Lithium carbonate jumped to a new record last Friday, on September 16, of 500,500 yuan/ton ($71,315) in China, after appreciating by nearly 1,000% than a Covid low touched in July 2020; prices of lithium hydroxide are also gaining and closing in on an all-time high set in April.

SQM (SQM), the world's second-largest lithium producer, recently issued its forecast of a "very tight market" for lithium in the coming years. The spike in prices for raw lithium – a key material used in batteries – are behind a rise in the price of EVs, making them less and less attractive to consumers already dealing with skyrocketing inflation in other items.

According to Benchmark Mineral Intelligence, the global weighted average price of lithium carbonate was $59,928 per metric ton in August, up from $13,924 in August 2021 and $6,128 in August 2020. The price would be even higher had the Chinese yuan not weakened against the U.S. dollar in recent months, Benchmark senior price analyst Daisy Jennings-Gray tells Axios in an email.

According to Kelley Blue Book, average electric vehicle price rose 15.6% in August on an annual basis, to more than $66,000. That's about $18,000 more than overall average new vehicle prices. Whether automakers can achieve their goals of lowering EV costs while lithium prices remain elevated. General Motors recently announced plans for the 2024 Chevrolet Equinox EV to carry a starting price of "around" $30,000.