AUTO

Electric cars are about to increase in price because of the sudden increase in the price of nickel

Supply concerns caused by Russia’s special military operation in Ukraine have sent nickel prices soaring to unprecedented levels, directly affecting the electric car industry.

Strong investment in electric cars is currently a general trend of the world car industry. From popular car manufacturers to luxury cars, all “bet” on electric cars. However, the Russia-Ukraine conflict presents a significant challenge for car manufacturers on the journey to promote electric cars.

According to Bloomberg, supply concerns caused by Russia’s special military operation in Ukraine have sent nickel prices soaring to unprecedented levels. On the morning of March 8, 2022, the price of nickel rose 250% to $ 100,000 / ton, causing the London Metal Exchange (UK) to suspend nickel trading. This is a very important metal in making batteries for electric cars.
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As predicted by analysts, the price of nickel will fall from the current unimaginable highs. However, the sad news is that nickel prices are likely to remain high, causing automakers to incur additional costs.
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“In terms of cost, nickel is the most expensive part,” said Sam Abuelsamid, an analyst at Guidehouse Insights. “Therefore, any change will lead to big impacts.”
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According to BloombergNEF, a 100 kWh battery pack of an electric car requires about 66 kg of nickel. Last year, the average nickel price was around $18,500/ton. This means that the amount of nickel in a 100 kWh battery pack will be worth about $ 1,200. However, with the current situation, manufacturers will have to spend about $3,100 on nickel to produce a 100 kWh battery pack, more than double last year’s average. This can increase the price of each electric car by hundreds of dollars. Tesla is a prime example.
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As soon as the price of nickel skyrocketed, Tesla immediately adjusted the prices of the Model 3 Long Range and Model Y Long Range models by $1,000. Meanwhile, the lower range versions of these two models remain the same. Thus, the current price of Tesla Model 3 Long Range in the US starts at USD 51,990 and the corresponding figure of Model Y Long Range is USD 59,990.
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Experts say that car manufacturers can avoid high nickel prices for a while thanks to long-term supply contracts. However, if the price of nickel shows no signs of “cooling down”, then automakers will have to pay more.
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According to some sources, car manufacturers may seek new sources of nickel from Indonesia. Meanwhile, nickel produced in Russia will be sold to China and other countries that have not imposed sanctions or boycotts. However, according to William Adams, director of metals and battery research at Fastmarkets in London, UK, nickel prices will fluctuate between $20,000 and $25,000 a tonne this year and keep an average of $22,000. .
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The electric car industry is currently scrambling to secure a supply of the metals used to make batteries to meet rising consumer demand. In the last few years, Tesla CEO Elon Musk has pointed to the risk of a nickel shortage as one of his biggest concerns. Escalating nickel prices mean that automakers will have to step up their efforts to find alternative solutions or supplies.

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