DigiTimes sources confirm that the main Chinese manufacturers of batteries for electric cars have reached an unsustainable situation, due to the increase in the prices of the materials necessary for their manufacture. That cost increase could lead to a “boycott” by manufacturers against material suppliers.
It seems that one of the main causes of this increase in costs would have been the war between Russia and Ukraineas well as the pressure generated by the inflationwhich have ended up shooting up the price of lithium carbonate and nickel, two essential materials for the manufacture of batteries for electric cars.
It is clear that, in the end, all is a chain. Rising price of materials stands at the base, and affects the cost that manufacturers of batteries for electric cars must assume. They then have two options: absorb this increase in costs by reducing their profits or pass it on to customers. If they opt for the latter option, they risk losing those customers, as they might not be willing to accept the higher battery prices.
However, it must be taken into account that, given their importance batteries for electric cars (they are a basic component), in the end the margin of maneuver that the main manufacturers of this type of vehicle have is not too wide either.
Turning to prices, DigiTimes says that in the first quarter of this year the price of lithium carbonate in China went up 60%. If we compare with the price they had at the beginning of 2021 we see that the price multiplied by ten. With this in mind, it is easy to understand why they are considering responding to this rise with a boycott, but there is a problem, and that is that in the end the demand for this type of material is so high that such a boycott would have to be very well coordinated, and produced on a large scale to have a “remarkable” impact.
As for nickel, it is said that its price increase was motivated more by speculation, that is, by a forecast of future costs, so it is possible that prices will normalize automatically in the short term, although It is not something we can take for granted. According to the news source, General Motors and the China Passenger Car Association have estimated that the impact of nickel price fluctuations on AFVs will be limited for now. This rise has mainly affected economical electric cars.
