The surging cost of lithium could impact the electric vehicle market as the commodity is a major component for companies like Tesla Inc (NASDAQ:TSLA). Here’s what Tesla CEO Elon Musk is suggesting to help offset the rising price.

What Happened: A tweet shared recently from the Twitter Inc (NYSE:TWTR) account World of Statistics highlighted the rising price of lithium.

Lithium is now trading at $78,032 per ton according to the post. Here’s a look at how that stacks up with recent years.

• 2012: $4,450
• 2013: $4,750
• 2014: $4,680
• 2015: $5,110
• 2016: $8,840
• 2017: $12,070
• 2018: $14,660
• 2019: $11,310
• 2020: $6,800
• 2021: $17,000

The post prompted a response from Musk, who said that Tesla could consider getting into the mining and refining business.

Several analysts recently shared their takes on the rising cost of commodities and the impact on the electric vehicle industry.

Morgan Stanley analyst Adam Jonas said there might be little relief for companies that need lithium for vehicles.

“Lower margins and/or demand destruction may be on the horizon,” Jonas said.

Why It’s Important: The note from Jonas highlighted that many battery manufacturers buy lithium at spot prices and don’t lock in costs with long-term contracts. As a result, batteries might cost 25% more to make.

Jonas singled out Tesla as being a company that could hold up better than others due to its scale and vertical integration.

While AMC’s investment was more about exploring a new sector, Tesla could take a similar approach and invest in or acquire lithium mining companies to help its supply chain.

Tesla signed a contract for lithium with Ganfeng Lithium, the largest lithium company in the world, that will last for a three-year period dating to the end of 2024.

Tesla also signed a deal with Liontown Resources, a leading Australian miner, to provide lithium to the electric vehicle company.

Given the increased prices of lithium, Musk’s comments and the increased competition for lithium for their electric vehicles, Tesla could be serious about making acquisitions in the lithium space to help with its own supply chain.

Related Link: Here's How Much The Cheapest Tesla Vehicle Is Now After Price Increases 

Stocks to Watch: There are a handful of publicly traded lithium companies that could turn out to be acquisition targets by Tesla and other automotive companies to help with the supply chain.

Here are some of the largest publicly traded lithium related companies:

Livent Corp (NYSE:LTHM)

Pilbara Minerals (OTC:PILBF)

Albemarle Corp (NYSE:ALB)

Sociedad Quimica Y Minera De Chile SA (NYSE:SQM)

Ganfeng Lithium Co Ltd (OTC:GNENF)

Piedmont Lithium (NASDAQ:PLL)

Lithium Americas Corp (NYSE:LAC)

Investors looking for a pure play option for exposure to lithium stocks can also consider the Global X Lithium & Battery Tech ETF (NYSE:LIT).