Shares of Lucid (NASDAQ:LCID), Rivian (NASDAQ:RIVN), EVgo (NASDAQ:EVGO), Fisker (NYSE:FSR) and QuantumScape (NYSE:QS) are all in the red today on fears of rising prices for electric vehicle (EV) batteries. The amount of metals needed for an EV battery varies, but a typical single-car lithium-ion battery pack contains around “8 kg of lithium, 35 kg of nickel, 20 kg of manganese and 14 kg of cobalt.” While the price of manganese has remained stable for the most part, the prices for the three other metals have risen significantly this year. And that’s been bad news for EV stocks.
Why Are EV Stocks Down Today?
Prices for nickel have soared about 60% year-to-date (YTD). Meanwhile, lithium prices have increased by over 70%, and prices for cobalt have increased by 16%. The demand for these metals have correlated with the demand for EVs. As a result, the price to produce an EV battery has risen dramatically this year as people replace their internal combustion engine (ICE) vehicles with EVs.
In addition, analysts from Credit Suisse have forecasted that lithium demand will be greater than the expected lithium output for this year and 2023. Australia is currently the largest producer of the metal, with China, Chile and Argentina trailing behind.
Rivian CEO Remains Confident in Production Guidance
CNBC released an interview with Rivian CEO R.J. Scaringe this morning. In the interview, Scaringe states that he is “really confident” that Rivian will be able to reach its production target of 25,000 vehicles this year. He also added, “The vast majority of our vehicle is not having supply chain constraints. It’s just a small percentage. It doesn’t take more than one part to stop the production.”
Scaringe also addressed the global semiconductor shortage that has affected a multitude of companies over the past year. He explained that he doesn’t expect the shortage to normalize until 2024. Meanwhile, the CEO emphasized that Rivian does not have a demand problem but a supply chain problem. The CEO characterized the problem as “frustrating,” although he expects the company to “get through that.”
Rivian announced price hikes for its R1T and R1S models last month. Starting prices for the R1T were raised to $67,500, while the R1S now carries a price tag of $72,500. However, Scaringe said that he expects to sell future vehicles on the “next-generation EV platform” at lower prices. The unnamed, lower-priced vehicles will be manufactured at Rivian’s plant in Georgia, which is expected to initiate production in 2024.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.