Most European Union nations and many American states have made public commitments to ban the sale or manufacture of new gasoline- and diesel-powered automobiles by 2030 or shortly thereafter.
In addition, many of the world’s automakers have stated their intention to end the manufacture of vehicles powered by internal combustion engines in the coming decades. But critical shortages of nickel and other minerals essential to electric vehicle (EV) manufacture may thwart these plans.
Nickel is a vital component of nearly every electric vehicle on the road.
A new report from Rystad Energy predicts a possible 33 percent rise in demand for nickel, from 2.5 million to 3.4 million tons, by 2024. This fact, says the Oslo-based energy research and business intelligence company, could come very close to the maximum the global supply chain could refine in a single year.
Rising EV Nickel Use
Engineering and equipment manufacturer Feeco International reports nickel has become a primary component of lithium-ion battery cathodes.
A new report from market research firm Roskill indicates nickel use in lithium-ion batteries will rise from just 5 percent of total nickel use today to the metal’s second largest end-use market.
Feeco says nickel lends several benefits to EV batteries, for example, higher energy density and more storage capacity, enabling EVs to get more miles out of a single charge.
Despite the fact that nickel prices have almost doubled in the past five years, rising from $10,336 per metric ton in August 2016 to $19,141 in August 2021, manufacturers are incorporating ever more of the element into the batteries used in EVs. Manufacturers of nickel-manganese-cobalt batteries, the current dominate cathode chemistry make-up for EV batteries, have increased the nickel content from 33 percent to 80 percent. A 90 percent nickel cathode battery is being developed.
Rystad’s report says the increasing use of nickel is likely to result in higher prices and smaller inventories, likely contributing to an increase in the sticker price of a new EV by thousands of dollars.
Auto Sales Declining
Currently, shortages of silicon chips and ongoing supply chain breakdowns have driven automobile inventories down and prices up for both new and preowned vehicles.
Cox Automotive reports tight inventory and high prices have brought five straight months of declining sales. Third-quarter new vehicle sales were forecast to be down by 14 percent from 2020 and 22 percent from the same quarter in 2020.
A Cox survey conducted in September found that 48 percent of new car buyers were “very likely” or “extremely likely” to delay their purchases due to a combination of higher prices and concerns about the direction of the economy.
History indicates, supply chain issues and economic concerns, combined with higher prices for EVs, in part due to higher battery costs, could result in continued declining sales, as people find repairing older gasoline and diesel vehicles cheaper and more convenient.
Are EVs A Reasonable Choice?
Higher prices, longer waits, inconvenient charging options, and other concerns continue to make EVs a poor option for many drivers, says Ann Bridges, coauthor of Groundbreaking! America’s New Quest for Mineral Independence.
“The lower and middle classes will put off purchasing electric vehicles regardless of the price,” said Bridges. “The idea that people on the lower rungs of the economic ladder all have garages with secure locales to plug in and recharge overnight is ludicrous and it won’t be easy for apartment dwellers, condo owners, or homes with multiple adult drivers to recharge EVs overnight, no matter what subsidies are offered.
“In EV sales leader California, 20 percent of former EV buyers, mainly women, have switched back to internal combustion engine vehicles, preferring the flexibility of longer driving ranges and quick fill-ups,” Bridges said.
Spotty availability of critical minerals will lead to even higher prices for electric vehicles, says Ben Lieberman, a senior fellow with the Competitive Enterprise Institute.
“An EV battery today can require up to 60 pounds of nickel,” Lieberman said. “While it is hard to predict the future price of nickel and other minerals like cobalt and lithium needed to make EV batteries, any policies that increase EV sales are bound to put upward pressure on the prices of the materials needed to make them.”
Duggan Flanakin (dflanakin@gmail.com) writes from Austin, Texas.
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