Nickel for Electric Vehicles Is a Dime a Dozen !! The metal is an increasingly important commodity for the likes of Tesla, but investors are exaggerating fears of a shortage !
After stalling in the first half due to pandemic-related shutdowns, electric-vehicle sales are growing fast again. Market leader Tesla produced 51% more vehicles in the third quarter than in the same period last year.
Most of the raw materials required for electric vehicles are the same as those used in conventional ones, but the metals that make up lithium-ion batteries are exceptions. Until recently, procurement worries—and market speculation—tended to center on lithium and cobalt. Now nickel has started to attract attention too. At Tesla’s “battery day” last month, Chief Executive Elon Musk said he had told mining executives to “please make more nickel.”
Prized for improving vehicle range, nickel has taken center stage in the chemistry of cathodes. One standard form of cathode—the most valuable part of an automotive-grade lithium-ion battery—used to contain equal parts of nickel, cobalt and manganese. Now it has eight parts of nickel to each one of the other two metals. This trend, together with the growth of electric-car sales, promises to lift nickel demand substantially.
Batteries are still an afterthought for nickel demand relative to the vast stainless-steel industry. Depending on how electric-vehicle sales ramp up, a step-change will probably come in the late 2020s. Until then, the kind of supply squeeze once expected in the much smaller markets for cobalt and lithium—which don’t have major alternative uses—is hard to imagine.
Meanwhile, the nickel market has become oversupplied as growth in China, the big stainless steel market, has slowed. Angela Durrant, a metals analyst for consulting firm Wood Mackenzie, isn’t expecting demand to exceed supply until 2028. The rebound in nickel prices this year, reflecting China’s faster-than-expected recovery from the pandemic, “defies fundamentals,” said Ms. Durrant.
