SAN FRANCISCO — Surging raw materials costs, made worse by Russia’s invasion of Ukraine, could set back the dream of Tesla Chief Executive Elon Musk and other auto executives to roll out more affordable electric vehicles.
Rising prices of nickel, lithium and other materials threaten to slow and even temporarily reverse the long-term trend of falling costs of batteries, the most expensive part of EVs, hampering the broader adoption of the technology, said Gregory Miller, an analyst at industry forecaster Benchmark Mineral Intelligence.
And that is on top of a supply chain already snarled by the COVID-19 pandemic and the global chip shortage.
“Rising raw material prices certainly have the potential to delay the timeline on cost parity between EV and ICE vehicles, which could hamper the wider adoption of EVs,” Miller said, referring to internal-combustion engine vehicles that dominate the market.
This year could mark the first year-over-year increase in the average price of lithium-ion battery cells, he said.
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