Raw material costs for electric vehicles have doubled during the pandemic

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  • Raw material costs for electric vehicles have more than doubled during the coronavirus pandemic, according to a new report Wednesday from AlixPartners.
  • The cost increase is being offset by materials such as cobalt, nickel and lithium – essential for producing the batteries used to power electric cars and trucks.
  • Automakers from General Motors and Tesla to start-ups like Lucid and Rivian to significantly increase prices on new vehicles.
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Raw material costs for electric vehicles more than doubled during the coronavirus pandemic, prompting automakers from General Motors and Tesla to price new vehicles for start-ups like Lucid and Rivian, according to a new report Wednesday from AlixPartners. was forced to increase.

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Average raw material costs for EVs totaled $8,255 per vehicle as of May, up 144% from $3,381 per vehicle in March 2020, led by materials such as cobalt, nickel and lithium – the batteries used to power electric cars. All necessary for the production of and trucks. According to AlixPartners, EV-specific costs have increased from about $2,000 to $4,500 in the past two years.

Cost increases are not limited to EVs: raw material costs for conventional vehicles with internal combustion engines have also nearly doubled to $3,662 per vehicle during that time period, up 106% from an average of $1,779 per vehicle in March 2020 is more. This increase is due to the increase in steel and aluminium.

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The cost increase comes as automakers aggressively launch new EVs over the next several years. AlixPartners predicts that the number of EV models available in the global market will increase from 80 last year to more than 200 by 2024.

As a result, AlixPartners expects higher costs to force a relative slowdown in EV launches, as automakers move away from pushing electric vehicles to market as soon as possible and refocus on profitability.

Ford Motor CFO John Lawler said last week that rising commodity prices had wiped out initial gains on the electric Mustang Mach-E. While the vehicle was profitable when it was first launched in late 2020, he said that is no longer the case.

Meanwhile, automakers are raising prices for buyers.

GM announced Friday that it will increase the price of its electric Hummer by $6,250. The automaker attributed the higher prices to parts, technology and logistics. Tesla, Rivian, Lucid and others previously announced a significant increase in the starting cost of their EVs.

—CNBC john rosevier contributed to this article.

Credit: www.cnbc.com /

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