Electric vehicles may not be a safe refuge for people hoping to save money as US gas prices hit record highs in the aftermath of Russia’s invasion of Ukraine. That’s because Russia is a key player in the manufacture of nickel, which is used in the batteries of many Electric vehicles and has risen in price even faster than oil. According to The Wall Street Journal, nickel was trading at around $24,000 per tonne on the London Metal Exchange on February 25th.
It was trading around $80,000 on March 8th, down from a high of nearly $100,000, and the London Metal Exchange had halted trading. There are a few reasons for the enormous price increase: it’s 2022, so there are financial shenanigans, but the market also can’t ignore the fact that a major nickel producer is at war and facing a flurry of international sanctions. Russia isn’t a major player in the nickel mining industry.
Of course, automakers are aware of nickel’s shortage. Tesla’s CEO, Elon Musk, announced in late February that the business aims to move away from nickel-hungry lithium-ion battery cells in its long-distance vehicles. Tesla will be shifting to iron cathode technology, he added, but it’s difficult to say how long that process would take. He called nickel the company’s “greatest risk for scaling.” It’s also ineffective when it comes to the more coveted long-range variants. Nickel prices were already a problem for EV producers before the invasion, according to Bloomberg and Reuters.