A GM employee poses with an example of the company’s next-generation lithium metal batteries at the GM Materials and Chemistry Systems Laboratory in Warren, Michigan, September 9, 2020.
Steve Fecht | General Motors | Brochure | via Reuters
BEIJING – Growing demand for electric car batteries will drive prices for key materials up, Goldman Sachs analysts said in a March 18 note.
This, in turn, will increase battery prices by around 18%, affecting the total profit for electric car makers, since the battery accounts for about 20% to 40% of the vehicle’s cost, analysts said. Goldman’s.
Although the report did not provide specific price targets for commodities, the analysts’ model predicted that a return to historic peak prices would more than double the cost of lithium for battery manufacturers. That of cobalt would also double, while the cost of nickel would increase by 60%.
A new type of battery
The limited availability of suitable nickel for automobile batteries may even accelerate the switch to another type of battery called lithium iron phosphate (LFP), the report said. Tesla and China’s Xpeng are among the automakers that already use this type of battery, which does not use nickel or cobalt, but stores relatively less energy.
If nickel prices reach their all-time high of $ 50,000 per tonne, that could add up to $ 1,250 to $ 1,500 per electric vehicle, which could hurt consumer demand for cars, analysts said.
Ultimately, the growth of the electric car industry and the demand for battery materials depends on how many vehicles people buy. The tipping point for consumers in general to switch from gas-powered vehicles to electric cars usually occurs when the battery cost drops enough.
This change could happen in the next decade. Goldman predicts that battery costs will fall below those of internal combustion engines by 2030.