The American president sees something positive in the surge in oil prices. According to him, it should accelerate the transition to electric vehicles… but Joe Biden is forgetting one thing, and it is crucial!
The price of electric cars is also likely to skyrocket. This week alone, analysts at Morgan Stanley bank estimate that their manufacturing cost has risen by at least $1,000.
At the heart of the problem is the cost of the metals needed to manufacture the batteries. Whether for lithium, cobalt, nickel or even manganese, the price had already exploded before the war. The Russian invasion of Ukraine did nothing to help the situation.
Right now, the world is going through a metals crisis of unprecedented magnitude. This week, the threat of seeing Russian nickel blocked on world markets caused its price to jump to a stratospheric level: $101,000 per ton! Russia controls 10% of the world’s nickel production.
The London Metal Exchange even suspended trading in this pure metal, as its price doubled in less than 24 hours. We have never seen anything like it since it opened in 1877!
Availablity
Getting your hands on an electric vehicle is already a feat. You have to wait at least two years to hope to drive certain popular models. And everything indicates that we will have to continue to be patient. The current metals crisis is likely to aggravate shortages.
Ford has promised to make 2 million electric vehicles a year by 2026, while GM hopes to sell 1 million by the middle of the decade by launching 30 new models. With the current situation, one wonders how manufacturers will be able to meet their commitments.
The price of metals used in batteries is rising at a faster rate than oil. We are forced to wonder if the transition to electric will take much longer than expected.
We must not forget that Canada wants to ban the sale of new gas-powered vehicles by 2035. Is this still a realistic timetable? Today, the question arises.
Hurry up!
Right now, electric vehicles are selling for around 40% more than comparable gas-powered models. Thanks to the development of technologies, battery manufacturers have greatly reduced their selling prices in recent years. However, this progress is now threatened by the soaring prices of lithium and nickel.
So if you are thinking of getting an electric vehicle, it could be advantageous to take action quickly. Book your model now! And by signing a sales contract, you could avoid a sudden and likely price increase.
So when Joe Biden declares that the war started by Russia should encourage everyone to buy an electric car so that “nobody has to worry about the price at the pump”, he is forgetting a major phenomenon: the crisis in metals. .
If the US president hopes that never again “tyrants like Putin will be able to use fossil fuels as weapons against other nations”, he may be disappointed.
If metal prices remain high for several months, as many analysts predict, electric models may not be the hoped-for remedy to rising gas prices.
