The increasing cost of raw materials and demand are driving up the costs of electric vehicles across the board.
Tesla, Rivian, Lucid, Ford, and GMC have all recently announced price hikes for their EVs–not exactly the news we want to hear. Even with the $7,500 EV tax credit stipulated by the newly-signed-into-law Inflation Reduction Act, this means an increase in EV prices across the board.
Axios reports that “the average transaction price of an EV in July was $62,893, up 14.8% from a year earlier, according to [analytics group] Edmunds. That compares to an average of $47,198 for all vehicles in July.” And that number only covers dealership-based sales, and does not include direct-to-consumer sales, which tend to be even more expensive.
A lot of this has to do with the jump in cost in many of the raw materials for EVs, which are about double the cost of those for ICE production. Battery materials in particular are cost drivers, with lithium, nickel, and cobalt going for a premium. Most of these elements are concentrated in mining operations abroad, and most of those mining operations are controlled by the Chinese Communist Party. Add in the turmoil to the global supply chain that first the Covid-19 lockdowns and second the Russian aggression towards Ukraine has caused, and it’s no wonder prices are up.
There are domestic sources for lithium at least, but these proposed mines are facing opposition from Native American tribes and environmental groups. And battery recycling is a nascent (though promising!) industry at this point.
Axios also notes that aside from supply chain issues, the increased popularity and demand for EVs has also prompted price increases.
If EVs are ever going to be widespread in the general population, prices have to come down–and hopefully they’ll do so sooner rather than later.