Nickel supply shortfall propels Chinese EVs to look for join ventures

Analysts have warned if Chinese-led projects in Indonesia fail to deliver, the likely hood of a shortfall in nickel will increase.

On Thursday, an executive from Chinese battery and electric car maker BYD CO Ltd disclosed, securing sufficient quantities of nickel has become a major worry for electric vehicle firms; as a result it is now looking to partner with others to mitigate the supply gap problem.

Nickel is one of several metals that are key components for the batteries in electric vehicle (EV). A shift in battery chemistry toward higher nickel content, which would allow cars to go further on a single charge, is expected to boost demand further.

“The supply of nickel going forward is a big concern in everybody’s mind,” said Coco Liu, procurement director at BYD, at the Fastmarkets Battery Materials conference.

BYD counts Warren Buffet among its investors and is also German automaker Daimler AG’s partner in China.

Analysts had earlier warned that there could be a shortfall in nickel if Chinese-led projects in Indonesia fail to deliver.

BYD is looking for suppliers who can provide high-quality products as well as for those who have experience in setting up joint ventures covering the whole EV value chain from upstream mining to precursor battery materials and finished products, said Liu.

Joint ventures are “a good way to go forward” and can save costs, said Liu while adding that BYD prefers to have diversity in its supplier base to reduce risks.

She went on to add, buying shares in a mine requires a large investment and entails risks, despite a potential rise in demand for raw materials for battery.

“We hope despite the volatility we can have a secure, stable supply with a relatively steady price. Then it will help with our final product sales and development,” said Liu.

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