How the Ukrainian Crisis Could Affect the EV Market

As the conflict in Ukraine continues to escalate, concerns over how a prolonged incursion may affect global markets has become a frequent topic of discussion, even as major world powers issue a raft of sanctions against Russia in an effort to end the conflict sooner. There are certain to be ramifications for the EV industry specifically as a consequence of the dispute, some of which we’re already starting to see, although their duration and severity are still in question. Here are some of the most prominent.

A Spike in Gasoline Prices

The cost of gasoline has steadily been rising in 2022 thanks to myriad factors, from a reduction in domestic drilling to a surge in demand as the economy comes back to life from lockdowns. According to AAA, the average price of a gallon of regular unleaded hit $3.55 on February 28^th, a full 79 cents more than the average at the end of last February. Because the US is relying more on oil from parts of the world directly and indirectly affected by the conflict, the price of crude could rise even higher in coming months. While pain at the pump is a very real thing for many Americans, it may also accelerate their transition to electric vehicles where fuel savings could be substantial. We continue to install chargers along the West Coast at a rapid pace in anticipation of this coming surge.

Supply Chain Issues in Auto Parts Manufacturing

Recently, Volkswagen announced a production moratorium at two EV plants in Germany because the conflict has delayed delivery of key manufacturing components, including wire harnesses that come largely from Western Ukraine. This is on top of semiconductor shortages that have already adversely affected auto manufacturing around the globe, so additional interruptions in the supply chain are likely to exacerbate problems with many EV producers, not just VW. According to the Wall Street Journal, Renault, Toyota, Ford, BMW and Porsche are also facing component shortages, although the impact on their EV operations is not yet fully clear. While a reduction in available EVs would certainly delay a widespread transition to electric, we believe the affect will be short-lived as suppliers set up alternative manufacturing facilities in the event the conflict is excessively prolonged.

Adverse Impact on Critical Metals

The UK-based Institution of Engineering and Technology claims the EV industry is likely to see significant headwinds because “rare-earth metal prices will skyrocket as [the] Ukraine-Russia tensions continue.” Neodymium and dysprosium, used in 80% of magnet-based EV motors, may face supply deficiencies as a result of delayed mining operations and air transport restrictions. Moreover, Ukraine is the world’s third-largest producer of nickel and aluminum, both critical to EV batteries, and the nation accounts for nearly 70% of the world’s neon gas used in automobile computer chips. Now, while disruptions in the supply of these metals will slow EV output, many automakers are already investing in new battery technology that eschews reliance on imported metals that involve complex processing, hazardous byproducts and trade with hostile partners. The culmination of this may be years away, but the clock has started.

Climate Initiatives Lose the Spotlight

The major media consensus is that the conflict is drawing attention away from the climate debate, especially as scientists prepared last week to release a UN climate report whose results Reuters described as “sobering.” A recent Forbes article titled “Ukraine Crisis is Terrible News for Climate Policy” notes the Senate is discussing a suspension of the federal gas tax that funds cap-and-trade, and domestic shale fracking is increasing to offset pricey oil imports. While these effects are not ideal, we also see this as an opportunity to draw attention to our overreliance on fossil fuels and the fact that a shift to clean energy alternatives would lessen our dependence on foreign countries where political tensions are more likely.

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Installation of the Month (February 2021): Hollywood & Highland

In the movie Spider-man, Uncle Ben tells Peter Parker, “With great power comes great responsibility.” The phrase, which came to be known as the “Peter Parker Principle,” is just as true today as it was 20 years ago when the movie first premiered. And just as Peter took seriously his newfound powers, we take seriously our responsibility to facilitate broader access to vehicle electrification options – quite literally the “great power” here is the electricity that keeps EVs moving. We also understand the power of movies and television to convey the importance of electric mobility, be it through information, entertainment or influence marketing. As such, Hollywood has become a tremendous partner in advancing the EVCS mission.

Installation of the Month (January 2021): Barlow Respiratory Hospital

While 2021 brings hope and promise for greater widespread adoption of electric mobility, a quick glance at our portfolio reminds us of all the headway we’ve already made toward that end. Last year, we seized on positive customer sentiment and abundant fiscal opportunities in the green energy space, allowing us to become one of the top installers of EV charging infrastructure in the State of California (with 500+ installations completed and counting). As such, we thought it might be worthwhile to share some of these installations with you – a new success story each month – so that you can see firsthand the favorable strides we’re making toward a carbon-neutral future.

2020: A Year in Review

Two thousand twenty has been a year of undeniable adversity, but also one of remarkable achievement. A year of firsts and hopefully a few lasts. A time of toil and tribulation, but also of triumph. For genuine success is partly defined by our ability to hurdle those implacable obstacles that make the result so noteworthy in the first place. Now, as the EVCS team looks back on this unusual year, we take stock of our unique achievements that made 2020 one for the books.

Electrification Progress in the Age of COVID

It’s pretty clear that vaccine or no, COVID will be here for a while, and with it the new normal of face masks, social distancing, telecommuting and (consequently) less road travel. While some might view this with trepidation, we see it as an opportunity. Since the earliest weeks of the pandemic, major metro areas like Los Angeles, Seattle and Chicago – those with large reductions in automobile traffic – immediately began seeing improvements in air quality, according to articles in the New York Times and Washington Post. More recent, an NPR story noted ozone pollution has decreased as much as 15% in many of these places. It seems an unintended consequence of the lockdown has been to accelerate the transition to responsible mobility by demonstrating its positive effects on the environment.

Commentary on Geotab’s 2020 EV Fleet Trends Article – Part II

Two weeks ago, we published part one of our commentary on Geotab’s in-depth article, “Electric Vehicle Trends 2020: Top 6 Factors Impacting Fleet Electrification” (https://www.geotab.com/white-paper/electric-vehicle-trends/). Again, the idea was to assess whether each of the trends were evolving as Geotab predicted and, if so, how EVCS was responding to them in the marketplace. Below are the final three trends referenced and our thoughts on each.