Nickel Prices Skyrocket Because Russia Is One of Its Main Suppliers

Among the debates involving the war Russia is promoting against Ukraine, some find it reasonable to argue that oil dependency would not exist if all cars were electric. The naive argument fails to understand that Russia is also a significant supplier of a critical component to the batteries that make EVs possible: nickel.
Battery cathodes with nickel made by BASF 6 photos
Photo: BASF/Creative Commons
Field Emission SEM of Ni-Co-Mn HydroxideBattery cathodes with nickel made by BASFNickel Mine, Leinster, Western AustraliaNickel mineNickel mining at Greenvale, October 1986
On Tesla Battery Day (September 22, 2020), Elon Musk asked mining companies to “mine more nickel.” That was almost two years ago, which is just an example of how essential this metal is for EVs, especially those the company plans to manufacture with 4680 cells. The more nickel some ternary cells have, the more energy density they can present – apart from avoiding controversial cobalt.

Nickel prices have more than doubled since the war started. A ton of this metal now costs more than $100,000. As John Rosevear warns in his article for CNBC, some EV manufacturers may have dodged this bullet by purchasing nickel for lower prices and in large quantities.

However, that is only valid if they have not bought it from Russian suppliers and if the pre-orders were enough to ensure production for years to come. Considering how raw materials for batteries are not a new concern, it is doubtful that mining companies sold enough nickel for more than a few months when they knew they could make a lot more money depending on the demand increase. They probably did not imagine a higher wish for EVs would meet supply cuts from one of this metal’s leading suppliers.

The only other possible option to nickel and the ternary cells it helps to build is the use of chemistry that does not rely on this metal. Luckily, it exists, and it is called LFP (lithium iron phosphate). Tesla already uses it in its entry-level vehicles made in China. BYD also uses it for its Blade Battery, which is expanding to many of its cars thanks to the e-platform 3.0.

LFP batteries can always be charged to 100% of their capacities and are less prone to thermal runaways – the primary cause of EV fires. The main problems they present are their performance in cold weather and a lower energy density. The good news is that those issues were efficiently tackled with better heating systems for the battery packs and CTP (cell-to-pack), a manufacturing technique that puts more cells into the same space.

What this teaches those trying to promote any cause in light of what is going on is that there are no easy solutions to these problems. As beneficial as EVs can be for personal transportation, climate change, and people’s health in big cities, you cannot just decide to buy one and expect that everything will be fine from now on. Wait to see EV prices in a few months: if nickel prices are higher, electric cars will not manage to avoid the same fate.

A peaceful world would allow people to buy goods from any country without fear of retaliation or feeding a slaughterous regime. Whether it is oil for combustion-engined cars or nickel for EVs, we know where this money will end regardless of what you drive. Ask Putin and his vladiminions about it.
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About the author: Gustavo Henrique Ruffo
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Motoring writer since 1998, Gustavo wants to write relevant stories about cars and their shift to a sustainable future.
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