American electric vehicles (EV) manufacturer Tesla will switch to using iron cathodes in its lithium-ion battery packs in its Standard Range models due to a shortage of nickel and increased prices thereof, founder Elon Musk hinted in a tweet. Nickel global prices had climbed significantly when Musk urged miners to produce more nickel back in July. Tesla’s decision to move to iron cathode could affect nickel demand and consumption in the EV industry.
According to media reports, nickel supply will be tight for the next three years, leading to a deficit by 2023 amid strong demand on the back of stainless steel production as well as EV batteries production. Most of the established auto manufacturers are planning to completely shift to electric vehicles in the next few years.
Nickel is currently an important raw material for EV batteries and enhances its efficiency while substituting cobalt. Nickel prices have gone up almost 51pc in the past year settling at $18,653/mt as on Friday. It is one of the base metals that rose significantly after COVID-19 shutdowns were eased in several countries.