The latest hurdle for an auto industry in the throws of an EV (electric vehicle) transformation is more higher prices.

Bloomberg reports Lithium carbonate prices hit a new high of 500,500 yuan, or $71,315, a ton today in China, this according to data from Asian Metal Inc. Lithium is a key component of battery cell technology used in everything from EVs to mobile phones.

Prices in China have tripled in the past year, leading to more pain for automakers looking to build EVs cheaply and for more buyers. Automakers with EV offerings from Ford (F) to Rivian (RIVN), and even Tesla (TSLA) have had to raise prices.

There are two recent drivers for higher lithium prices in China, which produces a majority of the lithium used by battery makers — demand and supply disruption.

Earlier last month the China Passenger Car Association predicted the country in aggregate would sell 6 million EVs in 2022, boosting its initial forecast and representing a doubling of sales year over year.

In the U.S., EV sales in the second quarter hit a new record, up nearly 70% from a year ago. Automakers and dealers are struggling to keep EVs in stock as demand grows for newer cars; currently Tesla’s Model Y Long Range has an estimated delivery date of early 2023, showing interest is still strong.

Bloomberg also reported on the supply side, electrical disruptions in Sichuan province, home to about 20% of lithium production in the country, have been affected by two weeks of power cuts. There is concern there might be future power shortages due to the coming winter heating season.

Analysts believe the price surge will likely be short-lived, however the supply issue may linger. "The recent spike in Lithium price ($70k+ per ton) is a result of constrained supply and should be rather temporary as additional supply comes on board," Kearny autos & industrials lead Doug Mehl says to Yahoo Finance. "Lithium itself isn’t rare (25th most abundant element) but the industry needs more mining and processing capacity. We see a significant supply shortage by the end of the decade."

Domestically the U.S. is pushing forward with its own lithium production, but these projects are likely years away from producing significant quantities. In order to shore up supply, many automakers like Tesla, Ford, GM (GM), and Stellantis (STLA) have invested directly into acquiring raw lithium.

In fact Tesla is looking into setting up a lithium refinery in Texas on the Gulf Coast, where it intends to process “raw ore material into a usable state for battery production," the company said in the application.

For Tesla, it's not just about cost control. "Tesla is pushing for vertical integration in this space to secure supply and control costs, but also to control quality and the social and environmental issues that can come with mining activity," Mehl says.

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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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