Tata Motors says 20% rise in battery cell costs increasing short-term pressure
Tata Motors (TAMO.NS), India’s top-selling electric carmaker, said the cost of battery cells had increased by around 20% because of a global surge in raw material prices, mainly lithium, putting pressure on the company in the short-term.
Shailesh Chandra, managing director of the passenger vehicles and electric mobility subsidiaries, told Reuters that cell prices have been rising over months and he expects them to remain high for about a year.
“Immediate impact seems to be about a 20% kind of an increase which will have short-term pressure. This should moderate within a year and then start coming down,” he said.
Chandra did not comment on whether this would affect the company’s sales or profitability but said that demand for “green personal mobility” was rising sharply and he expected to offset some of the costs by increasing the use of locally sourced components in its cars.
Automakers globally are facing inflationary pressures due to surging costs of nickel, cobalt and lithium that are used in making batteries – the most expensive part of an electric vehicle (EV) – as demand outstrips supply.
This has been made worse by Russia’s invasion of Ukraine, and analysts say it threatens to slow the trend of falling battery prices which could hamper the broader adoption of EVs, especially in price-sensitive markets like India.
