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Posted on EVANNEX on May 11, 2022, by Zachary Visconti
As the cost of important minerals for electric vehicle battery production increases, some Tesla investors are wondering if they should be worried. Some think that an upcoming supply crunch could make EV batteries skyrocket, and maybe even cause buyers to switch back to internal combustion engine vehicles instead.
Commodity prices for raw materials such as nickel and cobalt are on the rise, but ballooning EV battery prices shouldn’t make Tesla investors worried, according to an op-ed from Keithen Drury at The Motley Fool. Despite the increase in prices, demand for EVs remains strong, and the cost of production of batteries for EVs has dropped over the past decade.
Currently, cobalt and nickel supplies are fettered by a lack of supply, amidst ever-increasing demand for EVs. While around 70 percent of cobalt came from the concerning Democratic Republic of Congo in 2019, human rights abuses in the region have made working with the country on cobalt supply less than ideal. Nickel production has stagnated, with the world’s nickel production having peaked in 2013 at 2.6 million tonnes.
Pricing for both cobalt and nickel are likely to continue rising, unless new companies enter the mining space. Tesla has talked about mining its own lithium, and CEO Elon Musk said recently that the automaker could do so if prices don’t begin to improve.
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