A surge in battery metal prices means it could take several years longer for electric vehicles to become as affordable as conventional cars, according to BloombergNEF.
Prices of lithium, cobalt and nickel have soared in the past year, eating into EV makers’ margins at a crucial point in the development of the burgeoning industry. With demand climbing, they now face a dilemma: swallow the incremental costs, or try passing them on to consumers.
Before the rally, battery prices were nearing levels that would make upfront costs of EVs competitive with traditional cars without state subsidies, BNEF said in a report Wednesday. But that’s now starting to change. Battery pack prices are set to rise this year for the first time in more than a decade, and broader inflation could severely delay a crucial tipping point where average battery prices fall below $100 a kilowatt-hour.