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Metal Prices Are A Big Problem For Affordable EVs!
Higher lithium, cobalt, and nickel metal prices may delay electric vehicles from being as inexpensive as conventional cars. A jump in battery metal prices implies that electric vehicles will take many years longer to become as economical as conventional cars.
Lithium, cobalt, and nickel metal prices have risen dramatically in the last year, eroding electric car manufacturers’ profit margins at a critical juncture in the industry’s development. As demand rises, they must decide whether to absorb the additional expenses or pass them on to customers.
Before the rise, battery prices were approaching levels that would make EVs‘ upfront costs competitive with traditional automobiles without government subsidies. However, this is beginning to change. For maybe the first time in much more than a decade, battery pack prices to rise this year, and overall inflation could significantly delay a vital tipping point where battery cycle prices dropped below $100 per kilowatt-hour.
Lithium, cobalt, and nickel prices have all fallen or stabilized in recent weeks, which provides some relief to automakers. While the long-term outlook remains positive, Goldman Sachs Group Inc. predicts that the price of these three critical metals will fall in the next two years as companies rush to bring in additional supply.
At the very same time, conventional car sticker costs are rising, and rising fuel prices are rendering EVs more appealing.