Are nickel supply concerns a speed bump for EVs?

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Are nickel supply concerns a speed bump for EVs?

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 Are nickel supply concerns a speed bump for EVs?
Image source: Source: © Patongens | Megapixl.com

Highlights

  • Nickel is one of the most important and irreplaceable battery metals used in lithium-ion batteries (LIBs).
  • Automakers are collaborating with nickel miners to secure their future supplies.
  • Tesla has reportedly inked an undisclosed deal with Brazilian miner - Vale SA for the supply of critical mineral.

The heightened risk to gas supply in European Union amid the ongoing Russia-Ukraine crisis coupled with high power prices has certainly accelerated the green revolution with the deployment of renewable energy technologies. 

Nickel, one of the most important and irreplaceable key battery metal in lithium-ion batteries (LIB) has logged a wild rally lately. The supply shortage concerns created by supply-chain disruptions provoked by the ongoing chaos between Russia and Ukraine have intensified the already tight supply of metal in the global market. 

Must Watch: Liontown (ASX:LTR) Signs Lithium Supply Deal With Tesla, Shares Soar 

A slew of nickel supply deals

Automakers around the world have already set bold targets for vehicle electrification, though the industry has not yet planned the streamlined supply of nickel – an integral component for LIBs used to power EVs. 

 Lithium-ion battery

Source: © Olivier26 | Megapixl.com

Automakers are collaborating with nickel miners to secure their future supplies. Last week, EV giant Tesla reportedly inked an undisclosed deal with Brazilian miner Vale SA for the supply of critical mineral, as reported by Bloomberg News. 

Not only this, the world’s largest automaker had also signed another deal with the same miner last year for nickel supply from New Caledonia for battery production. 

The nickel mania is not limited to Tesla, a little over a week ago, Volkswagen group has also finalised a deal with Chinese Huayou Cobalt and Tsingshan Group to secure their own dedicated supply chains. 

The slew of nickel supply deals by pioneer automakers clearly indicates that demand for this critical mineral is only going to get hotter in the future.  

Good Read: Core Lithium (ASX:CXO) signs supply deal with Tesla, shares zoom 

Nickel’s wild rally

The effect of nickel's rising demand is also visible in its prices. The prices of the shiny metal had been rising steadily even before the conflict in Ukraine drove it up. The current crisis has roiled the nickel market and pushed prices up by a whopping 250% on 8 March 2022 to exchange hands at US$100,000 per metric tonne on the London Metal Exchange, the main commodities market for globally traded industrial metals. 

Nickel’s wild rally Source: © Edhardream | Megapixl.com

Recording an unprecedented rise, the exchange halted trading for a week and took the highly unusual step of cancelling billions of dollars’ worth of trades. Since then, trading in nickel has resumed and the price has eased somewhat but is still about 50% above 2021 levels.  

Must Read: IGO, MCR, NIC: 3 ASX stocks in spotlight amid nickel’s wild ride

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