EV market under threat due to war?
The rising raw material costs caused by the war in Ukraine has put the electric car sector in the corner: the effect resulted in an increasingly marked crisis.
There has always been a lot of talk about Elon Musk’s dream of making electric cars cheaper within a few years (specifically, we are talking about producing a Tesla that would cost around 25 thousand dollars). This dream, however, was interrupted first by the outbreak of the global Covid-19 pandemic and then by the outbreak of the Russian-Ukrainian conflict, which, in addition to being a huge humanitarian tragedy, is increasingly bringing production down, including the automotive industry.
War in Ukraine: hybrid and electric car alert
The exorbitant cost of fuels is not the only negative aspect of using our cars. We are also now dealing with various logistical factors and shortages and higher prices of materials, due to the war.
In the last year, the costs of some relevant raw materials, especially for the Electric Vehicle (EV) market, have skyrocketed to never-seen-before levels. Both Ukraine and Russia are global supplier countries of EV battery raw materials: in particular, Ukraine produces car cabling used for electricity and communication between the parties, while Russia is a large supplier of aluminum, used in the production of batteries, and of palladium, a mineral used in manufacturing chips.
According to the latest data provided by the Bavarian Business Association (VBW), lithium is up by 640% compared to 2021, titanium is up by 169% and nickel at 68% more costs the most.
There has also been an increase, although less, for aluminum and chromium, which compared to 2021 have gone up by 21% and 38% respectively.
Electric cars: EU targets at risk
Therefore, the European Commission’s goal of reducing pollution by 55% by 2030 appears to be at risk. The new climate package in favor of the environment presented in July last year also provides plans to end the sale of polluting vehicles in support of zero-emission ones by 2035.
So, what is the next move?
Among some of the solutions, VBW CEO Bertram Brossardt suggested that industry insiders reduce and limit dependence on individual suppliers by opting for the efficient use of raw materials, especially trying to increase the share of materials recovered through recycling.
But the real questions are: how will this sector evolve? Will we reach a turning point soon, or will we opt for new technologies?
The only goal that remains for sure is the fight against climate change, a commitment that Sotefin has maintained for a long time, find out how!