Russia’s invasion has has already made fuel prices go up, but electric cars will not be unaffected. The ever rising cost of raw materials is to blame, according to a new report published by S&P Global Mobility, which sees a clear link between the conflict and the the upward price trend of some elements that are vital for the construction of EVs.
The study, featured on Automotive News, is specifically talking about the materials necessary for the manufacturing of EV battery packs. Nickel is the most important out of these and since Russia is the world’s third largest supplier and the home of the world’s largest nickel producer, it also has control over the price (and availability).
Apparently the price per ton for nickel briefly shot up to $100,000 on March 8, more than three times what it was one day prior. Now it has dropped back to a more reasonable $37,115 per ton (accurate at the time of writing), but if we look at projections for the cost of nickel before the Russian invasion made by Capital.com, they expected it would hit $32,500 by the end of next year and $38,835 only in December 2025.
It’s almost at that level today, although its price is currently going down, so we can’t say when it will actually reach and exceed the 2025 projection.
S&P Global Mobility predicts that by the end of 2022, the price of raw materials that go into some EV battery packs could go up by as much as $8,000 per vehicle. This may not be fully reflected in the vehicle’s sale price, but it will still drive prices up.
Another problem facing automakers, one which could not only increase prices, but possibly stop production altogether is the possibility that their assets in Russia could be seized and eventually nationalised. This affects automakers like Volkswagen, Mercedes-Benz, Renault-Nissan and Stellantis.
Manufacturers have already been forced to pause production of some models and this could become a more common occurrence if the conflict doesn’t end. And even once it does end, it will still have changed the face of relations with Russia, so all manufacturers that were doing business in Russia and have now left the country, they run the risk of losing a lot – Mercedes-Benz reportedly has $2.2-billion in assets in Russia.