Electric-car makers may have to rethink how they source raw materials as the surge in commodity prices due to Russia's invasion of Ukraine puts pressure on their profit margins, analysts at RBC wrote in a note on Monday.
Prices of everything from oil to metals such as nickel and palladium used in electric vehicle manufacturing have soared as the crisis in Ukraine escalated.
"Just turning on the lights in the plant and transportation of goods cost more now and is a margin pressure," RBC analyst Joseph Spak wrote in the note.
A sustained increase in raw material prices rather than a short-term shock can become an issue for automakers, especially as many have a limited ability to implement further price hikes, according to the note.
"Either way, the lesson for autos is to rethink value chains, especially as the industry moves to battery electric vehicles," Spak wrote, noting the recent jump in nickel prices could translate to a $1,000 to $2,000 increase in the cost of a battery pack for an electric-car maker.
A variety of input prices, including for lithium, nickel, cobalt, and copper, could move "a lot" in the next few years due to mismatches in demand and supply, he added.
Even electric vehicle leader Tesla is seeing "significant" inflation for raw materials and logistics, its Chief Executive Elon Musk said on Sunday.
(Reporting by Aniruddha Ghosh; editing by Krishna Chandra Eluri.)