Electric-car makers should rethink raw material supply chains -RBC


An electric powered automobile is observed charging in Manhattan, New York, U.S., December 7, 2021. REUTERS/Andrew Kelly

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March 14 (Reuters) – Electric-car or truck makers may have to rethink how they supply uncooked supplies as the surge in commodity costs because of to Russia’s invasion of Ukraine puts stress on their income margins, analysts at RBC wrote in a observe on Monday.

Price ranges of every thing from oil to metals this kind of as nickel and palladium applied in electric auto production have soared as the crisis in Ukraine escalated. go through additional

“Just turning on the lights in the plant and transportation of products price additional now and is a margin stress,” RBC analyst Joseph Spak wrote in the take note.

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A sustained raise in uncooked material rates alternatively than a brief-expression shock can turn out to be an challenge for automakers, in particular as lots of have limited capacity to implement further price hikes, according to the be aware.

“Either way, the lesson for autos is to re-believe price chains, specially as the field moves to battery electric vehicles,” Spak wrote, noting the modern bounce in nickel costs could translate to a $1,000-$2,000 boost in the price of a battery pack for an electric powered-car or truck maker.

A range of enter rates, which includes for lithium, nickel, cobalt and copper, could go “a lot” in the following number of many years thanks to mismatches in demand from customers and source, he additional.

Even electric motor vehicle chief Tesla (TSLA.O) is viewing “sizeable” inflation for uncooked products and logistics, its Main Executive Elon Musk stated on Sunday. browse a lot more

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Reporting by Aniruddha Ghosh in Bengaluru Editing by Krishna Chandra Eluri

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