EVs (unfortunately) won’t save us from high fuel prices

If you’re tired of skyrocketing fuel prices and are thinking about the benefits of an electric ride, chances are you’re not alone. But…

If you’re tired of skyrocketing fuel prices and are thinking about the benefits of an electric ride, chances are you’re not alone.

But even though switching to an electric vehicle may seem like a no-brainer, there are some significant obstacles—including new problems caused by the conflict in Ukraine—facing the EV industry right now, which means that demand is likely to outstrip supply for the time being.

Interest for EVs

With diesel prices soaring around 245 lek/liter these days in Albania, electric vehicles are starting to look a lot more attractive to whoever wants to buy a car. But a combination of supply chain constraints, the global chip shortage, higher-than-average prices, and low inventory at dealerships will conspire to keep EVs out of reach for most people.

Interest in switching from gas to electric is at an all-time high. Car shopping site Edmunds reports the number of people searching for hybrid or electric vehicles jumped 39 percent from February to March and 18 percent over the last few weeks of April 2022.

It’s difficult to gauge whether immediate demand for EVs is up as a result of the increased gas prices over the past month, but some initial numbers suggest that may be the case.

Electric cars could be hard to find in the short term. Like basically anything moderately expensive and complicated to make that you might want to buy these days, from furniture to electronics, EVs are suffering the same general supply chain and labor shortages affecting so many industries.

Battery metal prices

There’s another big EV-specific roadblock that could be made even more complicated by the conflict in Ukraine: the precious metals and other raw materials that go into batteries of electric vehicles. Elements like lithium, cobalt, and nickel are all key to producing the technology that makes electric vehicles go. These were already facing big supply crunches before, thanks to the clean energy revolution: Demand for lithium alone is projected to grow 70 times by 2040.

Both Russia and Ukraine are important suppliers or dealers of many of these elements. While Russia’s actual nickel deposits are small, one of the world’s largest producers of nickel is a Russian company, which has not yet faced sanctions. Still, the idea of this company being cut off from the global market was enough to send buyers into a frenzy, and global nickel prices doubled in one day earlier this month. Just before the war, Ukraine began holding auctions to develop its reserves of lithium, cobalt, copper, and nickel.

“Raw materials are going to be an issue for years to come,” Markus Duesmann, CEO of Audi, told the New York Times newspaper. Automakers and experts say that the escalating tensions in Ukraine could accelerate the development of metals elsewhere as demand for electric cars increases. But since it takes time to develop new sources of these important commodities—which also have their own serious environmental and justice issues—the industry is looking at a long, possibly painful adjustment period.