The current environment of raw materials has made it clear why switching the majority of vehicles to electric within a timeline will be next to impossible. This would not only be hampering the estimate and commitments made for the switch but can become a big risk of fading momentum.
For a conventional car, the raw material prices and supply chain have been predictable though there have been waves of volatility in them. But for electric cars, the prices have been going up for all the materials every month. As the supply creation and delivery of the same has been at a very slow rate.
Currently, large quantities and long-time contracts are being signed for such materials. This does help the manufacturers with some predictability but then the problem becomes at what price. For example, nickel prices have been up by seventy percent since the Russia-Ukraine conflict started. Now, this price rise needs to be passed to the consumer with the smallest lag. This results in the price of the car fluctuating frequently with a large number of changes within a short time.
Though some businesses are looking at reusing battery materials that are discarded durability in terms of efficiency and reliability is a big question.
The major mineral supply gets processed in China and then surplus moves out as batteries and other components. This gives a high risk of policy or restrictions in the future. Even Indonesia, which is the largest nickel resource country has banned exports of ores and requires exportation of only processed products which leads to an increase in time and cost of supply.
If there is the risk of mass adaptation of this switch then underinvestment in fossil fuel will come back to haunt in terms of high prices for a long duration.
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