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Old 12-07-2022, 01:10 PM   #1
SubaDuba420
Scooby Specialist
 
Member#: 102793
Join Date: Dec 2005
Chapter/Region: NESIC
Vehicle:
2016 WRX
Ugly Sedan

Default Battery Prices Increase 1st Time In A Decade

Automakers like Ford and GM are scrambling to make EVs cheaper as battery prices rise for the first time in years
https://www.businessinsider.com/auto...t-rise-2022-12

Quote:
Electric car battery prices are rising for the first time in a decade, and that's a problem for automakers betting their futures on a shift away from the internal combustion engine.

That increase the effect of rising costs for battery ingredients like lithium, cobalt, and nickel, according to a new report from Bloomberg NEF likely won't impact vehicle prices anytime soon, experts say. And it's probably a temporary bump: BNEF predicts prices will drop in 2024, as more lithium production comes online.

Still, it's unwelcome news for automakers like GM and Ford, which are in the midst of an historic transition, as well as startup EV makers, all of which would like electric vehicles to produce profits sooner rather than later.

"The huge spikes we saw in prices of materials," said Andreas Breiter, automotive partner at consultancy McKinsey, "make it much more difficult to produce an electric vehicle profitably."

So, carmakers are racing to counteract those price hikes. The average new EV purchase was about $64,249 in October, according to Kelley Blue Book, and automakers know they need much cheaper EVs to make this work.

A few potential solutions
First, auto manufacturers are working to establish battery supply in the US, as most American players have long relied on foreign supply chains. A lot of the work to bring battery supply chains here is driven by stipulations in this summer's climate law, which ties crucial tax credits to the use of home-grown EV materials and manufacturing.

GM signed a contract with Australia's Controlled Thermal Resources to tap into its mining efforts in California. Ford's buying lithium from ioneer's mining project in Nevada.

Automakers are also exploring different kinds of batteries to reduce their dependence on traditional lithium-ion batteries and their highly-in-demand ingredients.

"While we have seen headwinds, we also have the opportunity to continue to drive down our costs from both an engineering and design perspective," Rivian CFO Claire McDonough said about battery costs at a Deutsche Bank industry conference in June.

Meanwhile, automakers are also establishing recycling plans, as returning the materials they need back into their supply chains could reduce what they have to spend on brand-new ones.

Still, roadblocks ahead
All those fixes come with their own problems.

Establishing an EV battery supply chain can't be done overnight. It takes years just to get a lithium mine up and running. Plus, many players auto giants, startup players, and everyone else building battery-powered products are competing for the same supplies.
And, any new EV battery mix comes with trade-offs. Using some materials instead of others, for example, could mean compromising on energy-density, faster charging capabilities, or performance measures. Automakers don't want to have to do that amid a push to convince consumers that EVs are just as enjoyable and useful as gas-powered cars, if not more so.

Because of the many challenges riddling the EV battery space, prospective car-buyers shouldn't expect automaker ideas to come to light in the form of lower EV prices quickly.

"There's still the potential supply chain questions looming over the entire industry," said Matt Sculnick, executive director of firm Nomura Greentech's advanced transportation team, "with a large portion of that being around batteries."
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