Fallout from the war in Ukraine includes escalating prices for nickel, a key element in electric vehicle (EV) batteries, threatening Germany’s ability to meet its greenhouse gas emissions reduction goal by 2030, according to intelligence services provider GlobalData.
Nickel is a significant ingredient used in lithium-ion battery manufacturing. Batteries are the most important component of the EV.
Russia is the world’s third-largest nickel producer, and the war upon Ukraine has led to the highest increase of nickel prices in a decade, which had risen by 18% to more than $24,000 per metric ton since the end of 2021 alone, pointed out Mohit Prasad, GlobalData’s Practice Head of Power.
With the transportation sector accounting for 20% of emissions in the country, Germany had set a target of 15 million EVs on the road within the next two decades. Two important drivers for EV adoptions has been the government’s central subsidy and battery prices. With battery prices surging and uncertainly on the central subsidy level after 2023, German may not be able to meet its EV target, GlobalData reported.
German automakers have already been affected by the crisis. Volkswagen, which had contributed more than 20% of country’s EV sales in 2021, has suspended production at two factories in eastern Germany because the crisis has interrupted deliveries of critical parts from western Ukraine. According to GlobalData, if the war continues, other manufacturers could also potentially suspend their operations.