The price of nickel has doubled to over US$100,000 (RM418k) per tonne as a result of Russia’s invasion of Ukraine, CNBC reports. Russia is a key supplier of the rare earth metal, but is now facing widespread sanctions following its invasion of Ukraine.
Nickel is a key ingredient in the making of lithium-ion battery cells used for electric vehicles. Automakers recently discovered that adding more nickel to the cathode can boost battery density, but its abrupt price surge may drive up the entry cost of EVs.
Morgan Stanley auto analyst Adam Jonas said: “As of this writing, nickel is up 67.2% just today, representing around a US$1,000 (RM4,184) increase in the input cost of an average EV in the US.” Jonas also noted that investors and automakers should reduce the earnings expectations and EV sales penetration over the next few years.
Vehicles most likely to be impacted by the hike are higher-end EVs, which typically have batteries with much higher nickel content. More affordable EVs use lithium iron phosphate (LFP) batteries, which have no nickel or cobalt in the cathode, but this also results in lower range.
Automakers in China have already been using LFP batteries (under government pressure to encourage EV adoption) in their lower-cost EVs for the past few years, and the battery gained further recognition when Tesla began introducing LFP in its entry-level “standard range” models last year.
With nickel prices skyrocketing, perhaps other automakers will follow Tesla’s lead once again.
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All raw material costs are also increasing, quite sadly
Indons will just need to dig a less bigger hole in the ground then until EV boom upticks again.