EV Battery Prices Might Be Going Rise Due To Surge In Raw Material Prices
The sudden rise in raw materials rate will also increase the EV battery price. Recently a report revealed that due to Russia’s invasion of Ukraine the raw materials are becoming expensive. So, the increasing price of raw products like nickel, lithium, and other raw materials could cause EV battery prices to rise.
The sudden hike of raw materials price
Over the past few years, electric vehicles’ battery prices have declined consistently. But this recent raw material price surge will create obstacles in EV battery’s affordability. Recently nickel prices hit the record. Nickel is one of the main components which is used in EV batteries. It is thought that production can be disrupted due to the current war between Russia and Ukraine. The leading producer of nickel in the world is Russia. Around 20% of the world’s high-purity class nickel is produced by the Russian mining company Nornickel. Similarly, lithium price is also rising. The current rate is more than double that at the end of 2021. Furthermore, the price of other raw materials of EV batteries is also increasing.
Research firm IHS Markit recently published a white paper where they expressed their prediction. According to the IHS Markit, the price of raw materials was already rising toward the end of 2021. They also predicted that the increasing rate of raw materials will increase the EV battery price which may continue until 2024. According to them, the average 2022 EV battery prices will be 5% higher than in 2021. Because the auto industry has a higher demand for lithium iron phosphate (LFP) batteries.
Additionally, the oil price is also experiencing an unusual hike which is also playing an important factor in to rise in EV battery costs. Bloomberg New Energy Finance (BNEF) 2021 report also predicted that the price might rise in 2022 which can reduce the affordability of EVs.