The most important component of an electric vehicle is its battery, which makes up a significant portion of the total cost of the vehicle. Changes in the price to manufacture or otherwise procure batteries for EVs can severely impact the cost of the vehicles themselves. There are a number of facets that play a role in battery pricing, and most of them revolve around geopolitical concerns. For one thing, EV batteries rely on lithium, nickel, and other rare earth metals. Russia supplies roughly 20% of the world’s nickel for use in all kinds of batteries (via The Wall Street Journal). With the ongoing war in Ukraine continuing to isolate the Russian government, society, and marketplace from the rest of the world, the availability of nickel for use in the fabrication of new EV batteries is strained to say the least.
Now, the Chinese manufacturing sector is responsible for contributing about 80% of global lithium-ion battery production, according to Visual Capitalist, with that percentage expected to decline. A trade war constructed by the previous administration has forced American car manufacturers to source batteries elsewhere, with many working to launch production of this essential resource in the United States rather than abroad. These stresses on the supply chain are a common theme for virtually all fabricated products that consumers rely on, but in the case of EVs, the product in question lies at the heart of the finished output.