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Electric cars to get more expensive as battery costs soar

November 8, 2021

By Paul Homewood

h/t Ian Magness

 

 

No S**t Sherlock!

 

 

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Drivers making the switch to electric vehicles risk being forced to spend even more amid rising battery costs, experts have warned, in a blow to Britain’s green ambitions.

The cost of lithium battery cells is rising for the first time after years of decline, with strained lithium supplies adding to rising prices of other cell materials.

Chinese battery producers are said to be writing to customers looking to renegotiate contracts, including moving away from fixed pricing structures.

The high upfront costs of electric cars is considered a key factor preventing consumers from making the switch from petrol or diesel. They are cheaper to run, but it can take years to recover upfront costs.

A survey published by consumer group Which? in August found that a Mini EV costs £26,000 while the petrol alternative costs £16,605. The cost of running the Mini EV over three years was £1,827 compared to £4,418 for the Mini One – a £2,591 difference, taking into account tax breaks and lower fuel and servicing costs for the electric car.

Benchmark Mineral Intelligence, the price reporting agency, said: “Battery makers appear set to pass on lithium price increases to the automotive manufacturers and other downstream customers, which could have a major impact on electric vehicles coming to market between 2022 and 2024.”

Petrol and diesel cars are being phased out in many countries in an effort to cut carbon emissions, with the UK set to ban the sale of new models in 2030.

Placeholder image for youtube video: rGVsHwANd2w

Technology and scale have been pushing down the costs of batteries and cars, with some studies predicting electric models could become cheaper to purchase by the middle of the decade. But rising battery costs risks slowing that progress.

The price of lithium ion cells has fallen from $290 [£215] per kWh in 2014 down to $105 this year, but Benchmark predicts it could climb to $115 next year.

Investment in new lithium production has been slow following a glut that triggered a price crash in 2018. With demand for electric cars growing as countries move to lessen use of fossil fuels, supply has not kept up, causing a surge in prices.

Benchmark says prices for battery grade lithium carbonate in China have climbed more than 300pc since October 2020, hitting $28,765 in October. Prices for nickel and cobalt, also key battery ingredients, have also climbed, with Benchmark’s cathode price index up by 62.4pc over the year.

It believes the lithium supply shortages are set to deepen next year and continue through the mid-2020s.

Benchmark said: “Battery makers are being buffeted by rising raw material cathode and anode raw material costs, which represent the largest share of a cell’s bill of materials, but also by price rises for peripheral battery cell components such as binder materials, and copper and aluminium foils used in electrode production.”

https://www.telegraph.co.uk/business/2021/11/07/electric-cars-get-expensive-battery-costs-soar/

Rachel Millard is being a bit naughty comparing running costs, which include fuel duty and cat tax for the petrol Mini. Whilst EVs are subsidised in this respect at the moment, this is not sustainable in the long run. She writes:

A survey published by consumer group Which? in August found that a Mini EV costs £26,000 while the petrol alternative costs £16,605. The cost of running the Mini EV over three years was £1,827 compared to £4,418 for the Mini One – a £2,591 difference, taking into account tax breaks and lower fuel and servicing costs for the electric car.

The running cost for the Mini One would be around £2000 to £2500. Her analysis implies that EVs are cheaper in the long run, which is patently absurd.

Independent mining experts have been saying for years that the exploding demand for electric cars and batteries generally would lead to raw material shortages and rocketing prices.

This is of course the opposite of the advice given to government by the wretched, lying Committee on Climate Change.

43 Comments
  1. Devoncamel permalink
    November 8, 2021 10:10 am

    Electric cars are not the silver bullet by any means, a fact well known to contributors to this blog. We are being forced down the EV route by ideological driven policy rather than waiting for innovation and technology to find solutions.
    On a pedantic point the price comparison example of the Mini One against the electric is misleading. The electric version is similar in performance and specifications to the petrol Cooper S, which is much more expensive.
    Consumers should have a choice and not have their right to choose impinged by cloak and dagger authoritarian governance.

    • Thomas Carr permalink
      November 8, 2021 10:47 am

      OK .If anyone cares to note the specifics:
      Honda Jazz !.5 Hybrid eCVT – 109 ps and 108 mph max listed @ £19,045.

      Apparent electric equivalent, 36 Kwh auto – 136 ps and 90 mph max listed @ £30,160.
      Sourced from WHAT CAR? June this year and summary says “undeniably expensive”.

      An expert may recognise that these are not direct equivalents.

    • Sobaken permalink
      November 8, 2021 11:12 am

      How is it similar in performance, if it has a 32 kWh battery that’s only enough to drive 150 km (200 in perfect conditions) and probably takes 4-5 hours to recharge. Compare that to a car with a fuel tank.
      Electric cars mandates are a huge policy mistake by any metric. Although, on the brighter side, with lithium getting more expensive, think of all the well-paying jobs created in Chile’s lithium mines.

  2. November 8, 2021 10:12 am

    No surprise here, especially with the rapidly expanding number of Battery Electric Storage System (BESS) facilities being proposed.

    • Devoncamel permalink
      November 8, 2021 10:19 am

      Isn’t all this because our government has thrown all its eggs in one basket? It’s EVs or bust.

    • November 8, 2021 2:49 pm

      And the fact that China owns half the world’s lithium natural resources, and is looking to acquire more. They won’t be dropping their prices any time soon, if ever. EVs are a fools’ paradise.

  3. GeoffB permalink
    November 8, 2021 10:21 am

    All comments (including mine) were gone this morning, yesterday my likes went from 15 to 1, Telegraph is getting worse than the guardian, censorship rules OK, my subscription will be cancelled today, Daily Mail here I (reluctantly) come,

    • Lez permalink
      November 8, 2021 10:36 am

      I think I’m going the same way. Nick Timothy writes in today’s DT;
      ‘That climate change is real, and is caused by human activity, is not disputed by anybody credible and does not need to be subject to political debate’

      • November 8, 2021 11:50 am

        They also have a large number of sceptical articles. or do you just prefer papers that support our view 100%?

      • Mike Jackson permalink
        November 8, 2021 1:01 pm

        To David Guy-Johnson
        No, David, the last thing I want is any news outlet to support my views 100%, but “That climate change is real, and is caused by human activity, is not disputed by anybody credible and does not need to be subject to political debate” is wrong because, to begin with, there is no agreement on what ‘climate change’ actually means, nor is there agreement on whether and/or to what extent humanity can be held responsible for it nor whether and/or to what extent 2° (or any other figure) of warming compared with some plucked-out-of-the-air date in the 19th century may (or may not) be beneficial to humanity as a whole — which, as human beings — ought to be our prime concern.
        The CCC has an agenda; the IPCC has an agenda; the environmental activists have a handful of agendas and (I speak from many years of painful experience) will tell any lie to further those agendas.
        Experience (not “the science”) tells me that mankind is almost infinitely adaptable to circumstances and to his environment and will get to “net zero” in the fulness of time, assuming it is achievable and makes sense for the good of the race.
        The same applies to all the other pet projects which activists are demanding NOW! If they make sense they will happen. We don’t need to be bullied.

      • mjr permalink
        November 8, 2021 5:24 pm

        the problem with the Daily Telegraph is that it is bi-polar.. Whilst the editorial stance is standard MSM toe the line on subjects such as global warming, lockdowns etc and so general news reporting and comment is bullsh*t , it also employs an number of columnists who, like a tesco trolley, have a mind of their own and actual produce critical comment and arguments against the status quo..
        Which is more than can be said for the likes of the BBC
        So you need to be selective and just read the columnists

  4. Gerry, England permalink
    November 8, 2021 10:22 am

    You wouldn’t expect an honest analysis of this. What about the costs of using charging points as that is likely to get more expensive in line with rising electricity costs plus the need to maintain them. A guy at my football club looked at the top BMW battery car but then found out that a charge up would cost over £50 which did not compensate for the superb performance, which when used to the full would be quire regular. As a contrast when I got the chance to get fuel during the crisis I filled my car right up for £70 and the display said I was good for 500 miles. I didn’t need fuel for over 3 weeks and am now back to just a quarter tank unless going far.

    While the claim for battery cars is less service costs what about wear rates for tyres given the extra weight of the battery? That is a fixed weight unlike my fuel tank. Are there heavy duty battery car tyres? Given the low demand one assumes not.

    • John Dawson permalink
      November 8, 2021 6:37 pm

      I have a Tesla Model S – it has quite big tyres – 245/45 on 19 inch wheels. They are exactly the same as fitted to high performance petrol cars because the Tesla is at least as quick and two sets have lasted almost 60,000 miles. So I don’t think there’s anything unusual here. My previous car, a Jaguar estate, ran on 17 inch wheels and the tyres were a bit cheaper, but then the Tesla has much more power. The Jaguar’s tyres also lasted 25-30K miles per set.

      On the other hand the Tesla servicing costs are minimal and the brakes should hopefully last the life of the car, because regenerative braking means I rarely need to hit the brake pedal.

  5. cj001muller permalink
    November 8, 2021 10:25 am

    Wednesday last week – “Tesla car runs out of battery and blocked a 5 storey car park at Westfield, London. Only for 3 hours though!”
    This confirms that EVs can stop dead – better not drive on a Smart motorway then.

    • mjr permalink
      November 8, 2021 5:27 pm

      It is a known problem.. If it stops you cant move them.. cant push them, cant tow them. All you can do is pick them up with a crane

      • devonblueboy permalink
        November 8, 2021 5:33 pm

        What a stunning design fault that is!

      • November 8, 2021 9:29 pm

        Also a good tip to drivers of automatic cars – if they break down, *don’t* put them into ‘Park’, but ‘Neutral’. I learned that by error 🙂

  6. November 8, 2021 10:38 am

    Reblogged this on Jaffer's blog.

  7. Post BREXIT permalink
    November 8, 2021 10:45 am

    It was not that long ago that we were being encouraged to buy diesel cars….. look where that little exercise ended up.
    Of course it is not jut the battery that is getting more expensive but also the electricity needed to charge the batteries.
    Will Lord Deben and his pals on the CCC revisit their calculations on how much Net Zero will cost?

    • James Broadhurst permalink
      November 8, 2021 3:21 pm

      One would have hoped Paul Johnson would have brought skills such as being able to count when he became a member of the CCC but appears not.

    • It doesn't add up... permalink
      November 8, 2021 9:48 pm

      They never made any in the first place.
      Little John Gummer
      sat with a plumber
      Inventing a net zero price
      He stuck in his needle
      Twisted and wheedled
      Just a few billion sounds nice

  8. November 8, 2021 10:47 am

    And how many zealots singing the praises of their wonderful new planet saving car were fooled into switching to diesels at the Government’s behest? Caveat emptor yet again?

  9. Stephen Wilde permalink
    November 8, 2021 10:52 am

    Second hand petrol cars could end up becoming pretty valuable.

    • Ray Sanders permalink
      November 8, 2021 12:37 pm

      Second hand car prices are already soaring – imagine what it will be like in 10 years time!
      Personally (living in the countryside) I’m considering setting up a wood alcohol still (methanol production) and modding engines to run on it….only joking, well maybe not!

  10. MrGrimNasty permalink
    November 8, 2021 11:10 am

    Still not that clear how much ‘carbon’ will even be saved, despite the constant refutation of such stories by the eco-mob:-

    https://www.thisismoney.co.uk/money/cars/article-10161697/Volvo-says-electric-car-making-emissions-70-HIGHER-petrol.html

    And if you are forcing people to give up ICE cars before the end of their useful life, some of the C used to make those is ‘wasted’ and needs to be accounted as an EV cost too.

    Same with solar PV, the suspicion that an honest ERoEI calculation is borderline just won’t go away.

    As some have commented – the Queen made an awful error of judgement recently.

    https://hitchensblog.mailonsunday.co.uk/2021/11/peter-hitchens-our-green-queen-has-just-made-a-terrible-mistake-by-taking-a-side-in-politics.html

  11. Douglas Dragonfly permalink
    November 8, 2021 11:15 am

    I guess all electric car support services are in place are they ?
    Mechanics, spares, insurance, breakdown recovery. Of course they are.
    However cheap gas to create affordable, plentiful electricity appears to be denied this country.
    Reading between the lines suggests a move to dramatically reduce the number of privately owned cars.
    There are already clean efficient and affordable ICE cars with the back up infrastructure in place.
    Almost all of those in parliament, with their nappies on their faces blatantly do not give a hoot about freedom of choice.
    We will only be remembered at the next election.
    Wasn’t there a sci-fi book written about this year’s ago ? A car chase. Between two police vehicles and a beautiful vintage Italian car ?

  12. Don Vickers permalink
    November 8, 2021 11:25 am

    What I want to know is the life of a battery? if it is about 5 years where are you going to dump all the old batteries ( the north sea sounds good for europeans ) They cannot be recycled ( some say they can but, that has been proven uneconomical so won’t be a consideration). In about the year 2025 you will have to start looking at this just as the windmills are being disposed of in great pits across the globe.

  13. Gamecock permalink
    November 8, 2021 11:45 am

    Great news! The elites showing how they care more than you do will be even more elite.

    Cirrusly, Model 3 buyers are well down into the middle-class.

    • It doesn't add up... permalink
      November 8, 2021 9:52 pm

      Personal purchases, or heavily subsidised company cars? No BIK tax on an EV and no VED is a huge saving compared with say a BMW 3 series diesel or petrol.

      • Gamecock permalink
        November 9, 2021 11:04 am

        Teslas are making a significant penetration in the car market here (South Carolina). Quite common on the road. Personal purchases. They are rather fun. But extremely expensive. A friend recently bought gunked up Model 3. $56,000* US. Musk announced the car a few years ago as going to be a $35,000 car. I doubt ANY were ever sold at that price.

        *Plus $1,100 to have a charger installed in his garage.

  14. Beagle permalink
    November 8, 2021 12:05 pm

    What a naïve way the UK and other governments have flaunted their intentions. Wouldn’t it have been better for them just to offer some suggestions as to what they were going to do when the technology had been developed and implemented on a commercial scale. Instead they say what they are going to and when even if the technology doesn’t exist. That then gives those that want to exploit the situation by controlling a lot of the required raw materials and laughing all the way to the bank whilst laughing at the stupidity of the virtue signalling governments.

  15. November 8, 2021 12:14 pm

    Besides the subsidy of the purchase price, and lack of road and fuel tax, there are also massive benefit-in-kind tax breaks for EV company cars, as much as £400 per month for petrol/diesel models becomes £0 for EVs.

  16. Ian PRSY permalink
    November 8, 2021 1:09 pm

    Nobody’s mentioned the likely impcat on grid-scale batteries. Does CCC need to recalculate?

    • T Walker permalink
      November 8, 2021 7:19 pm

      REcalculate Ian? They don’t have anyone who can add up (or x – / )

    • It doesn't add up... permalink
      November 8, 2021 9:56 pm

      I have posed that question elsewhere. It’s the Grid who have to work out how to cope. They’ll be able to measure the support they need, but it may simply not be available.

      https://watt-logic.com/2021/11/05/measuring-grid-inertia/

  17. bluecat57 permalink
    November 8, 2021 1:10 pm

    No problem. Government will just increase the subsidies and tax write-offs.

    • November 8, 2021 1:27 pm

      From the bottomless pit of climate funny money, presumably.

      • bluecat57 permalink
        November 8, 2021 2:04 pm

        Absolutely, electronic money costs nothing to produce. It is free.

  18. ecobunk permalink
    November 8, 2021 2:14 pm

    Non fossil electricity generation has the characteristic that the supply is constrained by the installed capacity. Until such time as 100% of our electricity can be supplied from non fossil sources, surely switching from a petrol or diesel to an electric car does not result in any significant reduction in overall CO2 emissions. An electric car is a fossil fuelled car for the next decade or two!

  19. Steve permalink
    November 8, 2021 5:44 pm

    There is comment on the reason for the very large reduction in the number of taxi drivers over the past two years. Where I stay in London, is home to a lot of drivers. When I arrived sixteen years ago there were four in our road. I spoke to the last recently and he had leased one of the few secondhand diesel taxis still allowed to operate in the centre. The price had risen to over £20k. The alternative was the electric model which he described as ” like taking out a mortgage “, at £85k. With a new battery to fit after 7 years there will be fewer taxis and higher fares. Meanwhile, Uber drivers use old hybid cars and drive on clapped out batteries with the petrol motor on all the time.

    • MrGrimNasty permalink
      November 8, 2021 6:45 pm

      There were too many drivers and too little work to go around. A lot of drivers were on the verge of giving it up. Councils are sucking them dry with ever increasing charges and mandatory training (spotting sexual exploitation etc.!) and mandatory video systems. Covid was just the final jolt. My brother had had enough before covid and has now moved on to other things. It’s a rubbish job people just tend to fall into as a last resort. (London cabs are a bit different).

  20. Bill Patterson Jr. permalink
    November 8, 2021 6:45 pm

    I understand that after 2 years of use the batteries operate at only 80% — time for a new battery. Throwing the old battery away is pollution. Making the new battery causes pollution. All while people charge their EVs on coal created electricity.

  21. T Walker permalink
    November 8, 2021 7:13 pm

    Yes but, but. aren’t the next gen batteries fueled by powdered unicorn horn????

    Nobody saw rising prices for lithium and cobalt etc. did they? Well only those with a brain.

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