The car industry’s multibillion-dollar bet on electric vehicles was built on a single premise: that batteries would carry on getting cheaper.
In 2019, Volkswagen executives even brandished charts predicting a steady decline in battery costs, as they laid out their ambition to consign the combustion engine to history.
For years the industry was proved right: battery costs fell from $1,000 per KWH for the first models more than a decade ago to about $130 in 2021, paving the way to making them affordable for middle income families.
Prices of nickel, lithium and cobalt — key raw materials for battery manufacturing — were already rising because of global demand. But with
But Russia’s invasion of Ukraine threatens to halt the slide.
Russia accounting for 11 per cent of the world’s nickel, and supply chains already stretched, the war has sent the cost of such commodities skyrocketing.
The price of these three metals required in a 60KWh battery, enough for a large family sport utility vehicle, has risen from $1,395 a year ago to more than $7,400 in early March, according to battery group Farasis Energy.
Battery companies, carmakers and suppliers are now grappling with the prospect that electric cars may be less profitable, or require cheaper materials, if they are to remain financially competitive.