Prices for electric vehicles rise against the backdrop of growth in the production of metal for batteries in Russia
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The price of nickel, the base metal for electric vehicle batteries, has skyrocketed. Although Russia is not a major nickel exporter, this has had a strong impact on the cost of producing electric vehicles.
As with the Russian invasion of Ukraine, it looks like electric cars may not be a safe haven for those looking to save money. That's because Russia plays a major role in the production of nickel, which is used in the batteries of many electric vehicles, a metal whose price has skyrocketed even faster than oil.
Nickel prices rose exponentially
According to The Wall Street Journal, on February 25, nickel was trading on the London Metal Exchange at a price of about $24,000 per ton. By March 8 it was trading at $80,000 100,000 per tonne (down from a high of over $2022), and the London Metal Exchange suspended trading. There are several reasons for the sharp rise in prices: since it is a year, financial fraud is involved, but the market also cannot ignore the fact that a major nickel producer is at war and facing a number of international sanctions.
When it comes to nickel mining, Russia is not a big player. The country supplies up to 6% of world nickel. For context, this puts it third after Indonesia and the Philippines.
Tesla plans to change the method to not depend on nickel
Automakers are certainly aware of the nickel shortage. In late February, Tesla CEO Elon Musk tweeted that the electric car company plans to phase out low-nickel lithium-ion battery packs. Calling nickel the company's "biggest scaling challenge," he said Tesla will move to iron cathode technology, but it's hard to say how long the process will take. It also doesn't help with the more desirable long range models.
Nickel prices are said to have been a problem for electric vehicle manufacturers even before the invasion. Musk also tweeted last week that the world needs to produce more oil and gas to make up for what it gets from Russia.
Volkswagen is also working on research into new technologies.
It's not impossible to make nickel-free batteries: Volkswagen and other automakers are exploring other battery technologies that don't use nickel or cobalt, which are also rising in price.
The problem that will make electric vehicles unattainable
But like energy policy, battery production and integration is a big challenge for automakers: if nickel and other metal prices remain high, it will be a race to switch technology before shockwaves hit higher prices and fines. If automakers don't switch quickly, electric cars may be out of reach for most Americans at a time when gas prices are making them look better than ever.
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