Nickel prices have soared recently, the United States financial media CNBC said that nickel is the key raw material for lithium batteries for electric vehicles, and Russia is a key producer of nickel, once the supply is limited, automakers and investors must rethink whether the great plans made earlier can be carried out smoothly.
Morgan Stanley auto industry analyst Adam Jonas, who has long been reminded of the problem, said in an analysis released Monday: "At the time of writing, the price of nickel rose by 67.2%, which represents an increase of $1,000 in the cost of each electric vehicle." ”
Nickel prices later rose not only without stopping but also became even crazier, and after more than tripling and prices topped $100,000 a tonne, the London Metal Exchange (LME) announced a suspension of trading on Tuesday morning to stabilize the market.
Jonas believes that investors should now reduce their expectations for car manufacturers to make profits, and the penetration rate of electric vehicles in the next few years can no longer be as optimistic as before. Rising to this level will dampen the electric vehicle development plans of major automakers around the world, such as General Motors and Ford Motor.
In recent years, automakers have found that if the use of nickel is increased at the negative electrode of a lithium-ion battery, the power strength of the battery can be enhanced to extend the endurance. About a third of the negative electrode of older lithium batteries is nickel. The newly developed battery pulls up the proportion of nickel, and most of the current negative electrodes contain at least 60% of nickel. Some batteries even remove cobalt, making the proportion of nickel even higher. For example, the batteries that LG Chem supplies to Tesla are 90% nickel in the negative electrode.
Batteries with high nickel content have significant advantages for electric vehicles. Nickel was not cheap before the War between Russia and Ukraine, and as automakers ramped up their efforts to push electric vehicles, the shortage problem has been pointed out by experts. Last fall, for example, analysts at Rystad Energy warned that the high-grade nickel needed for batteries for electric vehicles could be tight in 2024. Jonas of Daimo agrees.
CNBC said that if the rise in nickel prices continues, the most direct reaction of the electric vehicle market is the price increase, especially the high-end models that require batteries to have high performance and need to use more nickel.
The car factories that did not lock in the supply of nickel before the Russian-Ukrainian war may have to absorb themselves on the one hand and pull down the profit margins, and on the other hand, they must also pass on to consumers.
Affordable electric vehicles have been hit less severely because they have adopted an alternative battery called lithium iron phosphate batteries (LFP), and the negative electrode of LFP batteries does not use nickel or cobalt.
LFP technology batteries have recently begun to gain visibility in the U.S. market, mainly because Tesla began to use this technology for entry models last year, which was considered to be Tesla's efforts to reduce costs in order to increase the profits of entry-level models. Now that the price of nickel is soaring, CNBC said, it may have to see global automakers follow Tesla's footsteps.