How the Shortage of Battery Metal and Overall Cost of Batteries Could Slow EV Sales.

$Tesla (TSLA.US)$ $Nickel Concept (LIST0578.SH)$ $Aluminum Concept (LIST0770.SH)$ The mass adoption of electric vehicles (EVs) might be further dampened by the rise in prices for the metals — such as lithium, cobalt and nickel — used in EV batteries.

Steep rises in battery raw materials prices since the start of 2021 are causing speculation over either demand destruction or delays, and have led to the belief that automotive companies could shift preferences for their electric vehicles.

S&P adds that the lowest-cost type of battery pack has always been lithium-iron-phosphate (LFP), which Tesla has been using for its China-made entry-level models since 2021.

Other carmakers such as $VOLKSWAGEN AG (VLKAF.US)$ and $Rivian Automotive (RIVN.US)$ also announced they will use LFP in less expensive models, S&P added. Lithium prices have surged over 700% since the start of 2021, which has led to a big jump in battery pack prices.