Electric vehicles, nickel and reality


A worker exits a Tesla Model 3 electric vehicle at Tesla’s main vehicle plant in Fremont, California on May 11, 2020. (Stephen Lam/Reuters)

The Biden administration’s continued efforts to assert that electric vehicles will help hasten our way out of the current mess reflects a refusal to face the uncomfortable realities of the world we live in. Magical thinking is so much easier.

the Australian:

The Biden administration has been called “deaf” after Pete Buttigieg and Kamala Harris spent the afternoon promoting electric vehicles in the wake of America’s highest gas prices since 2008. The Secretary to Transportation was joined by the vice president to commemorate the one-year anniversary of the date the Biden administration passed the American Rescue Plan Act. Mr Buttigieg has come under fire for telling Americans electric cars are important for ‘cost savings’. “Clean transportation can also bring significant savings to the American people,” he said.

Cost savings?

the Today’s Telegraph:

Electric vehicle makers are bracing for a setback as the price of nickel soars.

As one of the most important components of lithium-ion battery cells, used in most electric vehicles (EVs), nickel is a vital material for the likes of Elon Musk’s Tesla build and sell cars. It is the third largest component of a car battery, after graphite and lithium.

At the same time, the metal is also essential for increasing the distance traveled by electric cars on a single charge: the more nickel in the battery, the higher the energy density and the greater the range of an electric vehicle by same weight is great.

But as Russia’s invasion of Ukraine adds to soaring raw material costs, automakers will be forced to shell out more money to make batteries, already the most expensive part of electric vehicles – or find alternative sources.

The price of nickel has gone crazy this week. This reflects a short press after a bet from the Chinese Tsingshan Holding Group (a nickel giant) horribly wrong. It will get sorted out fairly quickly, but the underlying rise nickel prices are not expected to disappear any time soon.

the FinancialTimes (emphasis mine):

Metal prices had already risen after Putin’s invasion of Ukraine. Russia supplies nearly 13% of the world’s total nickel mining capacity in 2021, according to consultancy Rystad Energy.

the The telegraph of the day (again, my emphasis added):

[I]f Russia is excluded from the market by sanctions or customers not wanting to be sullied by dealing with the nation or its government, “we’re going to see increased competition,” Miller said.

In other words, other uses of the metal, such as steelmakers and magnet producers, will compete for a smaller market, adding to price pressure.

Companies looking to source elsewhere outside of Russia would be difficult for the market to manage, according to Simon Moores, managing director of Benchmark Mineral Intelligence. He says a new mine can take five to seven years to produce, which makes the decision to open them risky…

Yet alternatives exist for automakers as new chemistries are developed, including lithium-ion phosphate.

According to Moores, it is a “substandard low-end battery” that is being used by automakers in China – the world’s largest auto market – to kick off production. Companies could pack more of these batteries into cars to reduce nickel usage if they wanted to.

Chinese automakers, he argues, will be the winners, while American and European producers of electric vehicles, such as Tesla and Renault, will lose.

“The reality is that China will gladly take nickel and cobalt and other raw materials from jurisdictions that the West would not accept. And as a result, they will go further and faster with electric vehicles and batteries,” says Moores.

The idea that China could dominate at least the affordable part of the EV market is a bit hard to reconcile with the new green jobs narrative that the administration is also so insistent on pushing, but here we are.

There is also this nagging question, made even more nagging by the current Russian trauma, of whether it is wise for this country, or its allies, to be dependent on a geopolitical rival in any industry that matters. now or could count in the future.

The answer to this question should be obvious, but . . .


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