Electric vehicle raw material costs doubled during pandemic

Employees inspect a Rivian R1T electrical automobile (EV) pickup truck on the assembly line at the company’s manufacturing facility in Standard, Illinois, US., on Monday, April 11, 2022.

Jamie Kelter Davis | Bloomberg | Getty Photos

Raw materials expenditures for electrical cars far more than doubled in the course of the coronavirus pandemic, according to a new report Wednesday by AlixPartners, forcing automakers from Normal Motors and Tesla to begin-ups like Lucid and Rivian to substantially elevate costs on new motor vehicles.

Typical uncooked content prices for an EV totaled $8,255 per motor vehicle as of May well, up 144% from $3,381 for every automobile in March 2020, led by products this sort of as cobalt, nickel and lithium – all necessary for the manufacturing of batteries employed to electricity electric powered vehicles and vehicles. EV-specific charges have improved to $4,500 from about $2,000 in the past two years, according to AlixPartners.

The price boosts are not limited to EVs: Uncooked substance expenses for standard automobiles with internal combustion engines have also much more than doubled all through that time time period to $3,662 for each auto, up 106% from an ordinary of $1,779 for each car or truck in March 2020. That uptick is remaining led by improves in steel and aluminum.

The value spikes occur as automakers aggressively start new EVs in excess of the future quite a few several years. AlixPartners predicts the variety of EV versions offered on the world-wide marketplace to raise from 80 past 12 months to much more than 200 by 2024.

As a end result, AlixPartners expects the larger expenses to power a relative slowdown in EV launches, as automakers move absent from pushing electric powered cars to market place as promptly as doable and refocus on profitability.

Ford Motor CFO John Lawler last week explained mounting commodity expenditures have wiped out the profit it in the beginning anticipated to make on its electric powered Mustang Mach-E. While the automobile was rewarding when it was to start with released in late 2020, he stated that is no for a longer period the scenario.

In the meantime automakers are boosting price ranges for potential buyers.

GM on Friday introduced it would hike the cost of its electrical Hummer by $6,250. The automaker blamed greater rates for elements, engineering and logistics. Tesla, Rivian, Lucid and other individuals beforehand introduced notable raises in the starting charges of their EVs.

— CNBC’s John Rosevear contributed to this report.