Tata Motors, India’s top-selling electric carmaker, reported the cost of battery cells had increased by around 20% due to a global surge in raw material prices, mainly lithium, putting pressure on the automaker in the shortterm.
Managing director of Tata’s passenger vehicles and electric mobility subsidiaries, Shailesh Chandra, said that cell prices had been rising over months and expected them to remain high for nearly a year. He said that the immediate impact looked to be about a 20%increase, which would have short-term pressure. He added that the pressure should moderate within a year and then dropdown.
Automobile manufacturers across the globe are facing inflationary pressures due to rapidly increasing costs of cobalt, lithium, and nickel used in making batteries—the most expensive part of an electric vehicle (EV)—as demand exceeds supply.
The global shortage of electric battery materials has worsened by Russia’s invasion of Ukraine. Industry analysts say the war threatens to slow the trend of depreciating battery prices which could hamper the broader adoption of EVs, especially in price-sensitive markets like India.
Lithium carbonate, a material usually used to make lithium-ion batteries, had its spot prices increased to over $70,000 per tonne in March 2022 from about $10,000 a year prior, according to data from industry analyst Benchmark Market Intelligence.
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