Car ownership may fade due to rising battery metal costs

The shortage of battery metals is driving up the costs of electric vehicles to the point where car ownership may transition to various types of rental models, said Matt Fernley, editor of Battery Materials Review and Head of Research for Westbeck Capital’s Volta Energy Transition fund.

On Friday Fernley recorded Kitco Roundtable with Mining Audiences Manager Michael McCrae, Editor Neils Christensen and Kitco correspondent Paul Harris.

Demand for electric vehicles is up sharply due to a big worldwide regulatory push and swiftly changing consumer sentiment. However, battery metals costs are rising quickly due to supply disruptions and just not enough mines online to meet the rising demand. This week nickel hit a 10-year high.  

"I think there is a risk that EV prices will have to stay outside the mass market," said Fernley "And that then raises the question: how do you sell EVs if they're double the price of internal combustion engines.

"Perhaps the auto companies will have to look at different ownership structures. So one structure that's been very successful in China is battery as a service where the OEM effectively sells the car, but they don't sell the battery, and the user—the owner of the car—rents the battery of the company," said Fernley, who points out this arrangement has advantages for battery recycling.  

Other means of getting EVs to consumers are fleet sales and contracting "...whereby the end consumer, like you and me, doesn't actually own the car.  

LINKS MENTIONED DURING THE PODCAST

Great Bear acquistion disclosures

How High Could Lithium Go by Matt Fernley

EDITOR'S NOTE: we are changing the podcast format. Neils Christensen will be starting his own macro-focused podcast. Paul Harris and Michael McCrae will concentrate on mining. Both podcasts will be published in this feed in the coming weeks.

DISCLOSURE NOTE: Podcast guest Matt Fernley mentioned Atlantic Lithium during the podcast. He holds stock in the company.