Tesla and other electric vehicle players face commodities pressure cooker
Igor Kutyaev/iStock via Getty Images

Nickel prices (LN1:COM) have soared over the last few days to hit record highs above $101K per metric ton. In the latest development, the London Metal Exchange halted trading on nickel for the rest of the day. The price action is tied to concerns about supply from Russia, which is the third largest producer of nickel in the world.
The higher price for the metal is crucial for the electric vehicle sector with nickel used in batteries. Morgan Stanley estimated that the surge in nickel prices could add $1,000 to the input cost of an average electric vehicle. While Indonesia is an alternative sourcing option, the process to turn the nickel into the kind used in an electric car is trickier.
Concerns about a nickel shortage in the future have already been in the background.
Last year, the hunt for nickel by Tesla (NASDAQ:TSLA) led it to being listed as a technical partner in a deal to take over a controversial nickel mine in French territory New Caledonia. Tesla is anticipated to buy nickel from the mine sold by Vale and assist with the site meeting sustainability standards. Tesla (TSLA) is also shifting some models to a battery type that uses iron.
The rising prices of nickel, lithium, cobalt, graphite and other materials is a threat across the EV sector and could push back the cost parity timeline between EVs and ICE vehicles. As for hiking prices to consumers, Rivian Automotive (NASDAQ:RIVN) faced pushback last week with its 20% price increase and Lucid Group (NASDAQ:LCID) has already tipped off it may need to boost prices even before the nickel price surge.
The list of EV players to watch for commodities pressures includes big and small players like Cenntro Electric Group (NASDAQ:CENN), Faraday Future Intelligent Electric (NASDAQ:FFIE), Canoo (NASDAQ:GOEV), GreenPower Motor (NASDAQ:GP), Kandi Technologies (NASDAQ:KNDI), Lucid Group (LCID), Li Auto (NASDAQ:LI), Nio (NYSE:NIO), XPeng (NYSE:XPEV), Mullen Automotive (NASDAQ:MULN), QuantumScape (NYSE:QS), Lordstown Motors (NASDAQ:RIDE), Electrameccanica Vehicles (NASDAQ:SOLO), General Motors (NYSE:GM), Ford (NYSE:F), Toyota (NYSE:TM), Nissan (OTCPK:NSANY) and Honda Motor (NYSE:HMC).
Dig into the breakdown of China-made electric cars for February.