Connect with us

Hi, what are you looking for?

Technology

Russia’s invasion of Ukraine puts a damper on dream of cheaper electric cars

Why it matters: The most optimistic forecasts from the auto industry suggest EVs will reach price parity with cars powered by internal combustion engines sometime in the next three years. However, surging prices for raw materials are dampening those expectations, especially in the context of the ongoing Russia-Ukraine conflict.

The electrification of the auto industry may be facing more challenges than expected in the near future. Automakers have already had to deal with a shortage of chips as well as increased prices for various materials, and now the dream of more affordable electric cars is starting to fade even more.

According to an analysis done by Benchmark Mineral Intelligence on the state of the supply chain, prices for materials like nickel, lithium, and other essential materials for making electric vehicles have surged in recent years and is already having an impact on the adoption rate. This means that it will take longer than expected for companies to achieve cost parity between electric vehicles and the internal combustion engine offerings that currently dominate the overall market.

While lithium-ion battery cost has fallen dramatically over the last three decades, this year could see a reversal of that trend. Russia’s invasion of Ukraine has only worsened the rising material costs of making electronics and batteries, as many in the industry fear a disruption in the supply of materials like platinum, palladium, nickel, copper, and aluminum coming from the two countries. Chinese suppliers are looking at this as a major opportunity as prices in the region have remained relatively stable, but the local auto industry may soon grapple with the same price inflation for EVs.

The average selling price for EVs in the US was around $63,000, or 35 percent higher than the overall industry average. Last year, Tesla increased the pricing of its base model cars even as it recorded a healthy profit. The much-needed network of EV charging stations may have been expanding in various regions, but several studies performed by market research firms seem to indicate consumers aren’t willing to pay more upfront for an EV despite lower maintenance and operating costs.

Advertisement. Scroll to continue reading.

Click to comment

Leave a Reply

Latest

Online Business Success

By Nellie Akalp It’s essential to understand the federal, state, and local employment laws that apply when hiring … [+] family. getty It’s common...

Technology

Interested in learning what’s next for the gaming industry? Join gaming executives to discuss emerging parts of the industry this October at GamesBeat Summit...

Technology

Minecraft is a game about breaking and placing blocks. At first, people built structures to protect against nocturnal monsters, but as the game grew...

Online Business Success

About eight years ago, while working in isolated rural communities in India, Rebecca Hui became increasingly aware of the powerful array of indigenous art...

Online Business Success

Steven Sulley – Founder of Woodbury House getty Wall writings and drawings have been around for almost as long as humans have. From cave...

Technology

Interested in learning what’s next for the gaming industry? Join gaming executives to discuss emerging parts of the industry this October at GamesBeat Summit...

Advertisement

You May Also Like

Uncategorized

Introductions get a lot of attention. I’ve explored the topic of how to write them even though as a reader, I always skip them....

Online Business Success

The internet is now our nervous system. We are constantly streaming and buying and watching and liking, our brains locked into the global information...

SEO Guide

There are all kinds of pictures of the world on the internet, but to find one of these specific pictures that you want to...

Online Business Success

You can think of link building in many ways. I like to call it tedious, painful, and a test of patience. It’s also necessary...

Advertisement