War Drives Up Nickel Prices, Essential Metal for Electric Car Batteries

The Metal Used In The Production Of Electric Cars Was Traded At The London Metal Exchange At US$ 101,365 Per Ton. The Price Increase Of Nickel Occurred Due To The War In Russia Against Ukraine

On Tuesday (9), nickel was traded at US$ 101,365, approximately double the historical high that occurred in 2007. The increase in the price of the metal used in electric car batteries occurred due to the war in Russia, which is the third-largest producer of nickel in the world.

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Despite being related to small coins, nickel is a semiprecious metal, like copper and titanium. At the current quotation, caused by the conflict between Russia and Ukraine, nickel is worth about four times the same weight in copper and ten times in titanium.

Theoretically, the war between Russia and Ukraine would favor the purchase and use of electric cars, as Russia is the largest supplier of gasoline in continental Europe. However, Europe does not approve of dependence on a country with Russia’s foreign policy. Dependence is the reason why sanctions cannot be absolute.

The increase in the price of nickel is directly linked to the war between Russia and Ukraine. Russia accounts for 13% of global mining capacity and is the third-largest producer of nickel in the world, which raises concerns that the country may not be able to export the commodity and, consequently, there may be shortages.

Rystad Energy, an energy research company, reported that concerns about interruptions in nickel supply after the war are escalating and inciting extensive nickel purchases.

Nickel is generally used to replace cobalt in the coating of cells in electric cars. Additionally, nickel is used in the production of alloys for magnets, stainless steel, and guitar strings. The increase in the price of nickel would lead to a rise in the cost of producing electric cars. According to a report by the International Energy Agency, a doubling of lithium or nickel prices would induce a 6% increase in battery costs.

Electric car companies generally tend to replace cobalt with nickel, as the mining cost is lower. Tesla, for example, will produce two types of batteries in the future, which will differ by the metal used.

According to Olhar Digital, the entry-level models will use materials produced from iron, while the more sophisticated electric cars will use next-generation 4680 cylindrical cells with a nickel-rich cathode.

Battery Production For Electric Cars In The European Union Could Be Affected

The economic sanctions against Russia were responsible for the increase in the cost of raw materials. According to Rystad Energy, battery manufacturers are increasingly facing difficulties in dealing with rising mineral prices.

The adoption of iron-lithium phosphate-based chemistry is an alternative to nickel in the production of electric cars. Iron-lithium phosphate batteries can be charged to 100% capacity and are less prone to thermal runaway. However, there is a downside: poor performance in colder climates.