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Lithium and copper spark $9bn cost headache for Japan automakers

No relief in sight from rising prices of materials to make cars cleaner and electric

A vehicle drives on a salt flat in Olaroz, Argentina, a source of lithium for batteries.   © Reuters

TOKYO -- Japanese automakers face a multibillion-dollar hit to earnings this fiscal year from rising prices of lithium, copper and other materials crucial to the shift away from polluting cars.

The effect of higher materials costs on operating profits stands to reach about 1 trillion yen ($9 billion) for Japan's six leading car companies, led by Toyota Motor, according company disclosures and estimates by Goldman Sachs Japan. This amounts to about 30% of their total profit forecasts -- and U.S. automakers are feeling the pinch, too.

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