ROME – From 2035 will only new zero-emission cars really be sold in Europe? Will there be 6 million electric vehicles in circulation in Italy in 2030?
At the moment these two crucial stages of the roadmap towards the electricity transition are confirmed, but what will happen if the war continues and sanctions on Russia lead to the blocking of exports of nickel, cobalt and other essential raw materials such as gas? According to leading financial analysts, the first consequence will be a slowdown in demand in Europe for electric vehicles, which in 2021 exceeded 10% of total registrations. And this will hinder the decarbonisation targets of Western economies.
According to LMC Automotive, while replacing imported Russian oil is not impossible, reducing dependence on Russian gas, used to generate 20% of Europe’s electricity in 2020, is much more difficult. And this will have a great impact on the spread of electric cars. The answer is renewables, but it is a long-term solution. Even a rapid acceleration towards nuclear power or wind, solar and hydroelectric energy, in fact, could not compensate for the closing of the Russian gas taps. To do this, production from renewable sources should at least double and this is not possible in a short time. Furthermore – LMC points out – the dependence on Russia for nickel, which in recent days has reached a peak of 100,000 dollars per ton, and other raw materials needed to produce the batteries will lead manufacturers to slow down or stop plans to reduce the prices of electric cars that, on the contrary, could increase, thus dampening the enthusiasm shown so far by consumers. An alternative could be the adoption of lithium-ion phosphate (LFP) batteries, which do not contain nickel or cobalt, but their development is still quite recent and moreover they are more suitable for low-end and entry-level cars.
The war in Ukraine and the sanctions against Russia also affect the auto industry
by Graziella Marino
The LMC study finds that fuel prices for combustion cars are also rising sharply but, in the final choice of the consumer, it is one thing to have to find a few tens of euros more to fill the tank, another is to have to find different thousands of euros more than expected to buy an electric car. Furthermore, with the acquisition of alternative supplies, the oil shock could be transitory, while solving the problem of rising prices for electric vehicles could be more difficult. Of course, governments could intervene by increasing incentives but, short of cash, they could rather decide to cut them. Even according to GlobalData, any sanctions applied to Russian nickel will further increase the production prices of electric vehicles, threatening their adoption and blowing up the decarbonisation targets, however this would not be a disadvantage for everyone.
Indeed, Russia is trying to reduce the impact of sanctions by turning to Asia. And electric vehicle companies in China could step in and buy Russian commodities at lower prices. This would further increase China’s already strong position in the battery metals supply chain, strengthening its competitive position globally. And – according to GlobalData – even the eventual use of western carmakers to other nickel producing nations such as Indonesia or the Philippines would lead to negative consequences.
The world of cars stops for the war in Ukraine. From Ferrari to Toyota, production stops for Russia
by Valerio Berruti and Graziella Marino
First, because Western carmakers would see increased emissions along their supply chains, as these two producing countries are geographically further apart and often adopt practices that are not environmentally friendly. Secondly, because Chinese companies play a key role in major nickel mines in these countries and this would lead to increased dependence on China. So can the electric revolution wait? It will depend on the timing of the conflict and the new geopolitical scenarios.