With the carbon peak and carbon neutralization schedule put forward by many countries around the world, the trend of electrification of the automobile industry has become irresistible, and some traditional car companies have cut into the new energy track in order to get a piece of the pie in this field. However, Goldman Sachs (Goldman Sachs) pointed out in a recent report that the hot demand for electric cars may undermine the profitability of electric car companies.
Goldman's logic is that growing demand for electric car batteries will lead to a surge in the price of the main raw materials, which in turn will raise battery prices by about 18 per cent, which will have an impact on the total profits of electric vehicle manufacturers. because batteries currently account for about 20% to 40% of the cost of electric vehicles.
Although the report does not give a specific target price for major battery raw materials, analysts' models predict that if raw material prices return to record highs, battery makers' lithium costs will more than double; cobalt costs will double; and nickel costs will increase by 60%.
Goldman Sachs points out that the prices of these three major natural resources have been rising since the beginning of 2021. The bank believes that in order to promote the sustainable development of the electric vehicle industry, some countries may consider implementing policies to increase national inventories.
Analysts said that if nickel hit an all-time high of $50, 000 a tonne, the price of each electric vehicle could rise by $1250 to $1500, which could affect consumer demand for cars.
The report also points out that the transition to lithium iron phosphate (LFP) batteries is likely to accelerate due to the limited supply of nickel for automotive batteries. Carmakers such as Tesla and Chinese start-up Xiaopeng Motor are already using the batteries. This kind of battery does not use nickel or cobalt, but the battery density is relatively low.
All in all, the growth of the electric car industry and the demand for battery materials depend on how many cars people buy. It is generally expected that when battery costs fall sharply, consumers will generally switch from gasoline-diesel-powered cars to electric vehicles. This shift is likely to happen in the next decade. Goldman Sachs predicts that battery costs will fall below the cost of internal combustion engines by 2030.
