Gas prices in the US have soared high up in the sky lately due to the Russia-Ukraine war. Electrical vehicles have become more expensive because of this. That’s because Russia plays an important part in the production of the nickel that ends up in batteries used by many electric vehicles which have gone way up in the price.
On February 25th, nickel was trading on the London Metal Exchange for around $24,000 a ton. By March 8th, it was trading at $80,000 (down from a peak of over $100,000), and the London Metal Exchange had suspended trading.
In a Twitter thread breaking down the issue, the CEO of Benchmark Mineral Intelligence says 20 percent of that supply comes from a single Russian company.
Elon Musk, CEO of Tesla, tweeted in late February that the EV company plans to shift its standard distance cars away from nickel-hungry lithium-ion battery cells. Calling nickel, the company’s “biggest concern for scaling,” he said that Tesla will be shifting to iron cathode tech, but the time of this shift is yet to be determined. It also doesn’t help with the more desirable long-range models.
Volkswagen and other automakers are exploring options for powering vehicles without batteries or cobalt.
However, this shift will be a huge one and cannot be one overnight. If the prices of nickel and other metals stay up, it’ll be a race to switch to another tech before the shockwaves of higher prices and sanctions make their way through the supply chain.