SUDBURY -- Following Telsa's Elon Musk recent call for the world to produce more nickel, prices for the metal reached US$6.85 a pound this week, up from US$5 in March and their highest level since November 2019.

In addition to expected demand for nickel as more electric cars are built, a story on the website said nickel production has been falling, adding pressure to prices.

"The Lisbon-based International Nickel Study Group reports global mined nickel fell 7.7 per cent in June compared to the same month last year, which still counts as something of an improvement from the sharp falls in April and May," the story said.

"Year to date production has fallen by more than 10 per cent to 1.1 million tonnes due to covid-19 related disruptions in major producing regions including Philippines (-28 percent drop in output year-on-year), Canada (-19 per cent) and Indonesia (-11 per cent)."

And Ken Hoffman, co-head of EV Battery Materials Research Group/Basic Materials Sr. Expert at McKinsey & Company, said in an interview with Kitco News that demand for high-grade nickel is increasing because it's such an important part of electric car batteries.

"Nickel is really, really good at holding electrons," Hoffman said. "And so we've seen batteries add more and more nickel at the expense of other metals, particularly cobalt. And as you put in more and more nickel, you can get longer range batteries, you can get batteries at actually recharge faster."

That's important, he said, because people want two things out of an electric car: for it to be reliable, and for it to travel a long way before it needs to be recharged.

But with production falling, and people like Elon Musk calling for nickel to be mined ethically, Hoffman said markets are concerned about where the nickel will come from.

"(Musk) knows he's going to need a lot of nickel, but has no clue where he's going to get that nickel from," he said.

He said demand for electric vehicles has taken off, especially in Europe where demand exceeds supply already.

"They're sold out," Hoffman said. "I mean, you just can't buy any electric vehicles over there."