Planning to buy an EV? Be ready to shell out more money
Price of the fossil fuel has been already increasing in the international market and in India too the impact has started. Now, it seems the price of electric vehicles is about to surge significantly, due to the ongoing Russia-Ukraine war. A study by S&P Global Mobility has forecasted that the rapidly rising cost of raw materials will impact the end price of electric vehicles.
The study points out specifically the raw materials necessary for EV battery manufacturing. One of them is nickel, which is a highly important mineral for making EV batteries. Russia is the world's third-largest nickel supplier and it is also the home of the world's largest nickel producer. This way, Russia has major control over the price and availability of this crucial mineral.
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The price of nickel shot up to $100,000 a ton on 8th March, which was more than three times what it was just one day prior. The price of the mineral has now dropped back to $37,115 per ton, but the projections suggest a significant hike in the prices over the course of the next few months. This would impact the price and production cost of electric vehicle batteries and eventually on the EVs as well.
A study before the Russian invasion of Ukraine previously projected that nickel price would be $32,500 by the end of 2023 and $38,835 in December 2025. Now, with the current price already much above the projection, the pricing would be high sharply. This would affect the electric vehicle's demand and sales over the long term. With the current trajectory, it is difficult to project what would be the price even by the end of 2022, let alone 2025.
Not only nickel but other raw materials too are becoming increasingly costlier than what they were before the war. S&P Global Mobility even predicts that by the end of 2022, the price of raw materials could go up by as much as $8,000 per vehicle. This may not be fully reflected in the vehicle’s retail price, but it will still drive their prices significantly higher.