AlixPartners Wednesday report shows that electric vehicle raw material costs increased by more than twice during the coronavirus epidemic. General Motors and Tesla were forced to open new businesses, like Lucid or Rivian to increase their prices for new cars.
As of May, the average cost of a EV’s raw material was $8255. This is 144% more than the $3.381 per car in March 2020. This was largely due to the use of materials like nickel and cobalt, which are vital for the production and maintenance electric vehicles.
These increases in cost are not only for electric vehicles. The raw material costs for traditional cars with internal combustion engines have more than doubled to $3662 per vehicle. This is 106% more than the average $1779 per vehicle in March 2020.
Automakers aggressively launch new EVs over the next years, resulting in increased costs. AlixPartners projects a rise in EV models to more than 200 globally by 2024.
AlixPartners predicts that higher costs could slow down EV launch launches, as automakers shift from pushing electric cars to market quickly and refocus on profitability.
John Lawler is Ford Motor’s Chief Financial Officer. He stated that rising commodity prices had wiped out the profits it initially expected from its electric Mustang Mach-1E.
Automakers keep increasing prices for customers.
GM’s Friday announcement that it would raise the price of its electric Hummer from $6,250 to $6,250 was a signal of its willingness and ability to do business alongside other automakers. Rivian, Lucid and others have reported significant increases in the starting prices of their EVs.