Here's Why EV Demand Continues To Soar Amid Odds

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  • Global EV sales in the first quarter jumped nearly 120% Y/Y even with sticker prices surging, contradicting the decade and a half myth of EV sales breaking out only after battery costs dropped below a threshold, Reuters reports.
  • The 2022 EV demand has stayed strong even as the average cost of lithium-ion battery cells soared to an estimated $160 per kilowatt-hour in Q1 FY22 from $105 last year, thanks to supply chain disruptions, sanctions on Russian metals, investor speculation, and environmental concerns.
  • Gasoline and diesel fuel costs for internal combustion vehicles also skyrocketed since Russia invaded Ukraine.
  • The report noted that higher battery costs added $1,500, equal to 30% of China's best-selling smaller EV sticker price like the Hongguang Mini. Mercedes-Benz Group AG DMLRY also looks to follow suit to counter the surging raw material prices. Experts see the trend continuing due to the battery industry's wafer-thin margins.
  • Experts predict another significant drop in battery prices due to big-ticket investments by automakers and suppliers in mining, refining, and battery cell production and a move to diversify raw material sources.
  • Photo via Wikimedia Commons
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