Ford And GM Face Rising EV Battery Prices For The First Time In A Decade

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For now, those costs haven't been passed on to consumers, but that could change.

A report has been published by Business Insider that states EV battery prices are on the march for the first time in at least 10 years. It claims the higher prices are a result of rising costs for a battery's components, specifically rare-earth metals. These include lithium, cobalt, and nickel, all of which are used to produce batteries for EVs like the Ford F-150 Lightning and Cadillac Lyriq.

Thankfully, the increase won't impact vehicle prices for now, just as the new car market begins to recover from its pandemic-related woes. Moreover, it is potentially a temporary bump. But that doesn't stop the brands that make the above EVs, GM, and Ford, from facing rising prices.

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When prices rise for producers, prices rise for consumers. Both Ford and GM are already working to counteract these new costs for battery materials, reports BI. Automakers know they need cheaper EVs to increase their market share, and thus, profits.

Volkswagen has poured cash into its MEB electric vehicle platform, selling more than 670,000 cars across its brands since the platform's introduction a few years ago. The numbers game seems to be working for VW, which recently promised upgrades to the platform like more range and faster charge times.

Another potential solution is a new source of battery supply, ideally here in the US.

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President Biden's Inflation Reduction Act heavily incentivizes the production of EVs in America, and that includes their batteries. GM now has a contract with the Australian firm Controlled Thermal Resources to leverage mining efforts in California. Ford, meanwhile, has begun buying lithium from Ioneer, a Nevada-based supplier.

Others work on recycling plans, arguably the most environmentally-sound strategy. EVs are cleaner than gas vehicles already, and working to leverage that is popular with EV buyers and a sound business decision. Tesla recycles batteries, and so does VW.

However, these solutions, like price changes, will take time to implement. Korean brands have asked for clemency when Biden enacted the IRA, and recycling batteries can still be inefficient, though it is better than outright disposal. For now, finalizing these solutions presents a significant roadblock for truly cheap and affordable EVs.

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Source Credits: Business Insider

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