Raw Material Costs For Electric Cars Doubled During The Pandemic And Its All Joe Biden’s Fault — Or Not

People get annoyed that the electric cars they want to buy are sold out for a year or more and rise in price almost daily. It must be Joe Biden’s fault, even though he was not in office during the Covid-19 pandemic. He did not say that people should drink bleach instead of getting proper medical care, but he is president now, so it must be his fault.

Reactionaries like to create financial pain and let others clean up their mess. It happened during the Reagan years, the reign of Bush The Youngers and Bush The Elders, and especially while Despicable Donald was in office. Everyone is mad at Joe Biden because the price of gasoline is so high that it can cost $ 100 or more to fill the minds of all the Suburbans, Expeditions, F-150s, Sierras, Silverados, and Rams that people insist on, They need. For many, they are what one CleanTechnica reader refers to as “driveway candy.”

Expenditure on materials for electric cars is rising

In its annual AlixPartners Global Automotive Outlook, the research firm finds that car companies have survived the pandemic in relatively good shape, but that the cost of the raw materials needed to build electric cars has more than doubled during the coronavirus pandemic. The study shows that the raw material cost of an electric car amounted to 8,255 USD per. vehicle in May 2022. That is an increase of 144% from $ 3,381 per vehicle. for the production of many of the batteries used to power electric cars and trucks.

The cost increases are not limited to electric cars. The raw material cost of traditional vehicles with internal combustion engines also more than doubled during that period, to $ 3,662 per tonne. vehicle, an increase of 106% from an average of $ 1,779 per vehicle. vehicle in March 2020. This increase is led by increases in steel and aluminum.

Nevertheless, automakers continue to introduce new electric cars. AlixPartners predicts that the number of EV models available in the global market will increase from 80 last year to more than 200 in 2024. As a result, AlixPartners expects that the higher costs will force a relative slowdown in electric car launches , as automakers move away from pushing electric vehicles to market as quickly as possible and refocus on profitability.

Price increases and profits

Ford Motor CFO John Lawler said last week that rising commodity costs have wiped out the profits it originally expected to make on its electric Mustang Mach-E, according to a report from CNBC. While the vehicle was profitable when it was first launched in late 2020, he said that is no longer the case.

Meanwhile, carmakers are raising prices for buyers. GM announced Friday that it would raise the price of its electric Hummer by $ 6,250. The carmaker blamed higher prices for parts, technology and logistics. Tesla, Rivian, Lucid and others have previously announced remarkable increases in the start-up costs of their electric cars.

The AlixPartners analysis finds that the variable costs globally of building an electric car remain $ 8,000 to $ 11,000 more than the cost of building a traditional combustion vehicle. The study says economies of scale will not be able to approach traditional vehicles until the end of the decade. This is despite the fact that the price per kilowatt-hour for a battery pack is expected to reach the $ 100 mark by 2025, analysts claim.

The analysis finds that the industry as a whole is very susceptible, not just to chip shortages, but to future disruptions to many materials – from steel to packaging – due to short-term ordering habits in the industry and low visibility in supply chains, plus design and engineering approaches, that does not allow flexibility.

In other words, the supply lines were created with little thought to how wars and global pandemics could affect the system. AlixPartners says automakers have a long way to go to get their houses in order and unravel the complex supply lines they created when everyone assumed globalization was the answer to everything.

It is so unfortunate that Joe Biden beat everything up, even before he took office. It went so well until he got his hands on the handle of power. Now we all have to suffer because the godless socialists are in control. That’s so unfair!


 

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