Climate

The price of nickel spiked this week. But it’s not the 'apocalypse' for electric vehicles just yet.

The metal is a core part of electric vehicle batteries.

A worker sprays water into a furnace at the MMC Norilsk Nickel PJSC copper refinery in Norilsk, Russia, on Thursday, Oct. 19, 2017. Norilsk Nickel, which mines the rich deposits of nickel, copper and palladium near Norilsk, has spent 2.5 billion rubles ($40 million) to lay fiber-optic cabling in the Siberian tundra. Photographer: Andrey Rudakov/Bloomberg via Getty Images

People are seeking out EVs right as supply chain issues tracing back to the price of battery metals will make that demand increasingly hard to meet.

Photo: Andrey Rudakov/Bloomberg via Getty Images

Nickel prices have been on a hell of a ride recently. The price of nickel saw an unprecedented surge earlier this month, doubling in price to $100,000 per ton on March 8. It has since swung wildly downward to $31,380 per ton as of Monday. The big initial spike was most immediately due to the impact of sanctions placed on Russia for its invasion of Ukraine, but there’s more to it; resources like nickel and lithium have been squeezed for almost a decade, and analysts have been waiting for the impending shortage to catch up with the rush to build out renewables and other clean energy technologies like electric vehicles.

Sure enough, supply chain watchers quickly looked toward green tech like electric vehicles as news of the short squeeze circulated across Twitter. “The price of nickel is going hyperbolic in a short squeeze for the ages today,” tweeted Ryan Petersen, CEO of global logistics platform Flexport. “Reminder that nickel is a key input for electric vehicle batteries.”

Oil and gas prices have also surged in tandem, as anyone who’s been to the gas pump recently knows. (Big Oil has also been raking in record profits due to commodity price swings.) This is creating a complex problem: People are seeking out EVs right as supply chain issues tracing back to the price of battery metals will make that demand increasingly hard to meet.

“We’ve woken up, for the first time in a couple of decades, to the geopolitical reality that things are impacted by commodities production,” said Jonathan Crowder, founding partner of renewables-focused investment firm Intelis Capital. “But the impact is slightly different because rising gas prices have the immediate impact that’s being felt at the pump today.”

Robert Mullin, general partner at the natural resources investment advisory firm Marathon Resource Advisors, sees something similar. He’s been bracing for the cost and supply shortage of battery metal mining to catch up with EVs since long before the Russian invasion of Ukraine. In fact, he predicted in a January 2021 report that, after nearly half a century of natural resources declining in value, prices are set for a rebound, due in part to supply chain constraints.

“We were naturally set up to have crises in all of these metals, materials and oil over the next two to four years anyway. Ukraine just brought it all forward,” he said.

But consumers are more likely to pay attention to the price of EVs, not intricate issues in the battery metals supply chain, said Crowder. A Morgan Stanley report released earlier this month pointed out that the surge in battery metals could increase the price of EV production by about $1,000 a car — something Crowder said is fairly marginal for now, but could make it harder for some would-be EV buyers to take the plunge.

The wild price swings can be seen in the ups and downs of Rivian’s fortunes recently. The company initially said it would raise preorder prices on two of its vehicles because of supply chain constraints and inflation. Then it walked that decision back after social media uproar, and a shareholder is suing. Tesla, too, announced 5% to 10% price hikes across all of its vehicles last week.

To adapt, Mullin said that EV companies should vertically integrate their natural resource mining supply chain. Tesla, for example, has created some buffer to price fluctuations and supply constraints by signing a deal with Minnesota-based Talon Metals Corp., which mines nickel.

But batteries aren’t only made of nickel — they include other metals, like cobalt and lithium, too. Vertically integrating all those types of mining could prove challenging for companies trying to produce the EVs we need to both get off oil and stave off the climate crisis.

Though batteries made with nickel can’t just be swapped out for other types of batteries into the same cars, several companies are working on creating battery packs that use different types of metals that could be used in new EVs. Zinc-air and sodium-ion varieties are widely considered the most promising.

Vertical integration could come with another challenge as well, particularly as companies set stringent climate and ESG goals. Mining can be environmentally destructive and the industry is rife with human rights abuses. By vertically integrating mining operations, Mullin said EV companies might find it harder to meet their ESG goals.

Yet solving these issues and making the mining industry a more just one is essential going forward. The Russian war on Ukraine and the volatility in the oil market show the need to kick fossil fuels to the curb, a move that would also weaken petrostates. But the climate crisis also demands we wind down carbon pollution or suffer a vastly degraded future. The Intergovernmental Panel on Climate Change found in a 2018 report that the world needs to increase renewable energy production up to a staggering 470% by 2030, all while oil, gas and coal use fall. The current wild swings in the nickel market show the need for policies and government support to keep EV and renewable tech prices low enough to spur even more widespread adoption.

Crowder, for his part, isn’t too worried. These supply chain issues, too, shall pass. “We have to look at the overall arc of battery pack prices over the last 10 years, which have fallen massively,” Crowder said. “I’m hesitant to call this the apocalypse for electric vehicles.”

Policy

Musk’s texts reveal what tech’s most powerful people really want

From Jack Dorsey to Joe Rogan, Musk’s texts are chock-full of überpowerful people, bending a knee to Twitter’s once and (still maybe?) future king.

“Maybe Oprah would be interested in joining the Twitter board if my bid succeeds,” one text reads.

Photo illustration: Patrick Pleul/picture alliance via Getty Images; Protocol

Elon Musk’s text inbox is a rarefied space. It’s a place where tech’s wealthiest casually commit to spending billions of dollars with little more than a thumbs-up emoji and trade tips on how to rewrite the rules for how hundreds of millions of people around the world communicate.

Now, Musk’s ongoing legal battle with Twitter is giving the rest of us a fleeting glimpse into that world. The collection of Musk’s private texts that was made public this week is chock-full of tech power brokers. While the messages are meant to reveal something about Musk’s motivations — and they do — they also say a lot about how things get done and deals get made among some of the most powerful people in the world.

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Sponsored Content

Great products are built on strong patents

Experts say robust intellectual property protection is essential to ensure the long-term R&D required to innovate and maintain America's technology leadership.

Every great tech product that you rely on each day, from the smartphone in your pocket to your music streaming service and navigational system in the car, shares one important thing: part of its innovative design is protected by intellectual property (IP) laws.

From 5G to artificial intelligence, IP protection offers a powerful incentive for researchers to create ground-breaking products, and governmental leaders say its protection is an essential part of maintaining US technology leadership. To quote Secretary of Commerce Gina Raimondo: "intellectual property protection is vital for American innovation and entrepreneurship.”

Keep Reading Show less
James Daly
James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.
Fintech

Circle’s CEO: This is not the time to ‘go crazy’

Jeremy Allaire is leading the stablecoin powerhouse in a time of heightened regulation.

“It’s a complex environment. So every CEO and every board has to be a little bit cautious, because there’s a lot of uncertainty,” Circle CEO Jeremy Allaire told Protocol at Converge22.

Photo: Circle

Sitting solo on a San Francisco stage, Circle CEO Jeremy Allaire asked tennis superstar Serena Williams what it’s like to face “unrelenting skepticism.”

“What do you do when someone says you can’t do this?” Allaire asked the athlete turned VC, who was beaming into Circle’s Converge22 convention by video.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Enterprise

Is Salesforce still a growth company? Investors are skeptical

Salesforce is betting that customer data platform Genie and new Slack features can push the company to $50 billion in revenue by 2026. But investors are skeptical about the company’s ability to deliver.

Photo: Marlena Sloss/Bloomberg via Getty Images

Salesforce has long been enterprise tech’s golden child. The company said everything customers wanted to hear and did everything investors wanted to see: It produced robust, consistent growth from groundbreaking products combined with an aggressive M&A strategy and a cherished culture, all operating under the helm of a bombastic, but respected, CEO and team of well-coiffed executives.

Dreamforce is the embodiment of that success. Every year, alongside frustrating San Francisco residents, the over-the-top celebration serves as a battle cry to the enterprise software industry, reminding everyone that Marc Benioff’s mighty fiefdom is poised to expand even deeper into your corporate IT stack.

Keep Reading Show less
Joe Williams

Joe Williams is a writer-at-large at Protocol. He previously covered enterprise software for Protocol, Bloomberg and Business Insider. Joe can be reached at JoeWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

Policy

The US and EU are splitting on tech policy. That’s putting the web at risk.

A conversation with Cédric O, the former French minister of state for digital.

“With the difficulty of the U.S. in finding political agreement or political basis to legislate more, we are facing a risk of decoupling in the long term between the EU and the U.S.”

Photo: David Paul Morris/Bloomberg via Getty Images

Cédric O, France’s former minister of state for digital, has been an advocate of Europe’s approach to tech and at the forefront of the continent’s relations with U.S. giants. Protocol caught up with O last week at a conference in New York focusing on social media’s negative effects on society and the possibilities of blockchain-based protocols for alternative networks.

O said watching the U.S. lag in tech policy — even as some states pass their own measures and federal bills gain momentum — has made him worry about the EU and U.S. decoupling. While not as drastic as a disentangling of economic fortunes between the West and China, such a divergence, as O describes it, could still make it functionally impossible for companies to serve users on both sides of the Atlantic with the same product.

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

Latest Stories
Bulletins