EV makers counted on batteries getting cheaper; war changed the picture

The car industry's bet on electric vehicles was built on the idea that batteries would get cheaper.

Volkswagen executives brandished charts predicting a decline in battery costs as they laid out their ambition to consign the combustion engine to history.

The industry was proven correct when battery costs fell from $1,000 per KWH for the first models more than a decade ago to about $130 in 2021, paving the way to make them affordable for middle-income families.

The slide could be halted by Russia's invasion of Ukraine.

Key raw materials for battery manufacturing were already rising because of global demand. With Russia accounting for 11 percent of the world's nickel and supply chains already stretched, the war has sent the cost of such commodities skyrocketing.

The price of the metals used in a 60KWh battery has gone up from a year ago, according to Farasis Energy.

If electric cars are to remain financially competitive, battery companies, carmakers, and suppliers will have to find cheaper materials.

The raw material prices are a burden for our target to reduce battery costs.

The impact of rising prices on the roll out of electric cars is yet to be raised by most European car executives.

Since the invasion, the prices of aluminum, steel, and copper, which are also used in engine-powered models, have risen as well.

We have to be aware that we need specific materials for batteries, but we also need other materials for our cars.

BMW has long-term supply contracts with all battery cell suppliers, according to Thomas Becker. He wouldn't say that there was an imminent effect on the structure of supply.

It would be premature to make any predictions about a longer lasting and structured impact on our supply chains.

As a result of the big increase in the cost of petrol, demand for battery-powered cars has increased, and the prospect of electric vehicle price rises comes as a result.

According to Bernstein, more than 1.1 million battery-driven cars were sold in the first two months of the year, a 90 percent increase over the same period last year.