iClima Earth : The price of nickel, lithium and cobalt, key raw materials for batteries and therefore electric vehicles, have surged since the invasion.
Gabriela Herculano, manager of iClima Smart Energy UCITS ETF (DGEN)
“On the surface the rising cost of key inputs for electric car batteries is concerning. The story underpinning electric vehicles and other attempts at decarbonisation is that costs are falling – these technologies are deflationary. Rising prices, therefore, looks concerning. However, we should put this in perspective – the metal inputs of electric cars and batteries are not rising in isolation. All sorts of metals from copper, steel, aluminium to rhodium, palladium, platinum have surged in price since the start of Russia’s war on Ukraine. It is not just electric vehicles that require specific metals – so do conventional, petrol-powered cars. For instance, one of the biggest users of rhodium, are petrol-powered cars. It is used in engine exhausts to neutralise harmful nitrous oxides.
“The recent price surges of battery and EV inputs should be put in the wider context: empirical evidence gathered since the 1970s shows historical decreases in the cost of lithium-ion batteries, currently the key chemistry in both stationary and mobile batteries. With long-term deflationary trends bringing the cost EVs down (short term supply chain and commodity price spikes notwithstanding), much lower maintenance needs, and the increasing price of gasoline at the pump, EVs are set to increase market share due to price competitiveness.
“Electric Vehicles (EV) are a solution to our pressing need to decarbonize transportation. In 2021, global sales of EVs more than doubled. According to the EV Volumes Database, global sales of Battery Electric Vehicles (BEV) and Plug-in Hybrid Electric Vehicles (PHEVs) in the global light vehicles market (passenger cars and light commercial vehicles) passed 6.7 million units in 2021, representing 8.3% of all sales in this segment. This volume translates to 108% growth over 2020. China dominated sales with almost 3.4 million BEVs and PHEVs sold, more than 50% of the total, followed by Europe with over 2.3 million units and North America with 0.73 million units.”
Source: ETFWorld
Subscribe to Our Newsletter
