According to S&P Global Mobility, electric vehicles will be the most affected by price increases. This is because nickel is used in making batteries in Tesla’s Model Y and the Audi e-tron.
Higher car prices could be seen at dealerships in three months, depending on the activity in commodity markets. The U.S. Labor Department reported Thursday that consumer prices rose at 7.9% annually — the highest rate of inflation since 1982.
Matteo Fini of S&P Global Mobility is an expert in automotive supply chain and told CBS MoneyWatch that if we see higher material prices, eventually it will translate into a higher price point.
According to Edmunds, the average price of a new car has increased by 12% compared to a year ago.
The per-ounce palladium price, which is used to make catalytic convertors, began the month at $25,589 an ounce, and had risen to $3,084 by Thursday. Nickel’s price rose so quickly that the London Metal Exchange ceased trading for it.
Aluminum saw a record-breaking price increase last Friday, but it has since dropped to $3,328 per tonne.
As more U.S. companies and European businesses cut ties to Russian producers of aluminum, nickel, and palladium, the Ukraine conflict is pushing up metal prices. Norilsk Nickel is the largest producer of palladium and nickel in the world. Fini stated that 40% of all metal materials used in automakers are from Russian companies.
Automakers are finding it harder to sell cars due to higher metal prices and a global shortage of semiconductors . Fini stated that these factors have created “upward pressure” on many automakers.
Rivian, a maker of electric vehicles, announced last week that it would increase its prices by $12,000 for pre-ordered cars due to the higher cost of raw material. After customers complained via social media, the company reversed its decision.
Stellantis, GM and Ford did not respond to MoneyWatch’s requests for comment on the effect of metal prices on vehicle pricing.
Stellantis CEO Carlos Tavares told reporters last week, that automakers are imposing a self-imposed ban on Russian imports to alleviate pre-existing costs in the sector linked to the pandemic.
According to Reuters, Tavares stated that “we have an escalation in cost that comes out of raw materials and energy that will put more pressure on our business model.”
