Elon Musk faces dire situation as Putin’s invasion ‘heavily impacts’ Tesla’s production

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Russia’s invasion of Ukraine has caused chaos in the global supply chain, affecting everything from energy prices to the supply of fertiliser. Whether these shortages are a result of western sanctions on Russia, or of Putin squeezing supply as retaliation, prices of various commodities have skyrocketed. In the midst of this crisis, Tesla and other electric vehicle companies are facing a difficult situation as the price of nickel, a key component of electric vehicle batteries rise to record levels.

According to Katie Tamblin, the Chief Product Officer at Achilles, Tesla CEO Elon Musk is currently facing a dire choice, to stop the rollout of electric vehicles due to a shortage of nickel, or release his vehicles with a poorer performing battery that avoids these shortages.

Speaking to Express.co.uk, she said: “For the [Ukraine] crisis itself, the material that is heavily impacted, is nickel which is used in electric vehicle batteries.

“EV batteries can shift to non-nickel batteries, but not immediately
“Tesla has shifted some of their batteries- their standard range Model 3 uses a non-nickel non-cobalt chemistry battery.

“That’s an LFP – lithium iron phosphate which is in a lower range of the same size battery.”

Ms Tamblin warned that such batteries are not as high performing as the ones that have nickel in them.

She added: “They don’t take you as far, they won’t charge as well, but they don’t have any nickel in them.

“As a result of this crisis, and nickel prices doing what they’ve done over the last ten days, that may become a more palatable option.

“That might mean an impact in the performance of batteries in order to keep batteries being produced.”

Last week, the price of nickel spiked 90 percent to reach an all-time high.

A major reason for this is that Russia currently supplies the world with around a tenth of its global nickel needs, which are mainly used for stainless steel and EV batteries.

According to Ms Tamblin, these new non-nickel batteries essentially “engineer out the requirement for nickel and cobalt”.

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Even though these batteries are not as efficient as Lithium-nickel batteries, she believes that the spiking nickel prices will incentivise EV producers to downgrade their batteries.

She continued: “[Tesla] haven’t been able to get the same performance out of those batteries that they can get out of batteries that use Nickel and cobalt.

“That’s why you haven’t seen a complete shift to these lithium iron phosphate chemistry batteries.

“But if nickel becomes price prohibitive, people will probably take a performance hit to get a cheaper battery.”

However, she warned that even switching certain electric vehicles to a non-nickel battery will not prevent a shortage of electric vehicles from being rolled out to customers.

When asked if shortages are still likely, she said: “Yes, because right now I believe its the Tesla Standard range Model 3 that has the non-nickel battery.

“Bear in mind that the rest of the Tesla range is still dependent on Nickel.”

Last week, the price of Nickel at the London Metal Exchange was up 76 percent at $50,925 a tonne from an earlier $55,000 (£41,700), the highest on record.

Looking at these prices, Ms Tamblin remarked: “That’s a huge impact on all of those vehicles that have a nickel component in their batteries.”

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