RENEWABLES ARE BECOMING MORE PREVALENT While renewables are becoming more prevalent, and their lower price volatility bringing positive effects to price stability and energy grid adoption, their impact remains small and faces an uphill battle. Additionally, EVs require a combination of essential rare earth metals, such as lithium, cobalt and nickel, sourced from all over the globe making battery production and cost susceptible to supply chain crunches, geopolitical risks and mining issues. Over the last few years, prices for the metals required for EV battery production have seen significant volatility. In 2022, supply shortages resulted in record-high prices for lithium, cobalt and nickel resulting in increased costs for EV battery production. These increases in costs were often passed onto the consumer resulting in higher prices for EVs, in turn making potential consumers more
hesitant to make the switch to electric. [Global electric vehicle supply chains struggle to keep up as demand continues to surge - Fastmarkets]
While these prices have recently dropped and may decline further, it is important to understand that overall demand for these metals will continue to grow – not just within the EV sector. Further underlying the importance of a sound risk management strategy in an effort to solidify a transition to a greener economy.
Electric Vehicle and Battery Material Report - December 2024 > EV & Battery Materials Outlook > Market Insights > Sucden Financial
The specific material needs for the production of EVs and the energy grid’s reliance on fossil fuels illustrates how EV prices are increasingly exposed to fluctuating raw material costs. Fossil fuel prices (somewhat ironically), and renewable energy integration difficulties combined with volatile prices of nickel, cobalt, and lithium can and do create challenges for lawmakers and consumers to adopt and implement these greener technologies. Ultimately at the cost of advancing a greener economy.
24 | ADMISI - The Ghost In The Machine | Q1 Edition 2025
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