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Rising raw material prices will hold EV battery affordability on hold until 2024

Rising raw material prices could drive up EV battery prices, according to a recent source Reuters report.

According to the report, battery prices have been on a steady decline over the past few years, but soaring prices of nickel, lithium and other materials – exacerbated by Russia’s invasion of Ukraine – could halt or even reverse that trend.

Nickel prices hit a record high on Monday on concerns that exports from top producer Russia could be disrupted, the report said, noting that the Russian miner Nornickel produces about 20% of the world’s high-purity grade one nickel, which is used in EV batteries.

Average annual battery energy storage system cost (credit: IHS Markit)

Average annual battery energy storage system cost (credit: IHS Markit)

Lithium prices have also increased, more than doubling since the end of 2021, the report said. However, prices for lithium and other raw materials have increased by the end of 2021, according to the research firm. IHS Markit.

In a recent white paper, IHS Markit predicted that rising raw material prices will cause EV battery prices to continue falling through 2024. That analysis predicts that 2022 average EV battery prices will be 5% higher than with 2021, mainly due to an increase in the number of cars. industry demand for lithium iron phosphate (LFP) batteries.

Rising oil prices – another byproduct of the Ukraine conflict – could counterbalance the rising cost of electric vehicle batteries, Reuters recognition report. But many of the EVs currently sold in the United States are expensive luxury models at a time when affordability is key to increasing market share, the report said.

Sono Sion LFP . Battery Pack

Sono Sion LFP . Battery Pack

While Russia’s invasion of Ukraine could push raw material prices up rapidly, an increase in battery prices is expected.

A December 2021 Bloomberg New Energy Finance (BNEF) report predicted that price may increase in 2022—And, potentially 2023. That could push $60/kwh (at the package level) which some see as a goal for affordability further.

There are already indicators of how rapidly cell costs are falling seen half a decade or more ago is slowing down. Some also predict that even if cellular costs eventually drop, The electric car itself will cost more to make.

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