Russia ranks third in world nickel production, a circumstance that has boosted nickel prices after the invasion of Ukraine.
Refined nickel metal is the main form of nickel used in electric vehicle batteries. It is a key component in the cathodes of many of the most common lithium-ion battery chemistries, such as nickel manganese cobalt (NMC) and nickel cobalt aluminum (NCA).
The United States does not produce any primary nickel metal (high or low grade) domestically.
Russia is one of the world’s leading producers of both raw nickel ore and concentrates, as well as refined nickel metal.
In 2021, Russia produced around 250,000 metric tons of nickel in concentrates, making it the world’s third largest producer of mined nickel, behind Indonesia and the Philippines.
Although Russia is a major source, some auto producers have signed supply agreements that would limit the impact of the conflict on their ability to source nickel.
After describing this context, the Fed added that the most immediate impact of the conflict on the U.S. auto industry (and other nickel-consuming industries) could be the resulting increase in the world price of nickel and nickel-derived products, such as batteries.
Nickel production
In February 2022, the U.S. Geological Survey added nickel to the list of mineral commodities critical to the U.S. economy and national security.
Nickel was added due to «growing demand for nickel as a component to produce cathodes for lithium-ion batteries, and limited mining, smelting, and refining capacity in the United States…»
At the same time, other commentators have proposed updates to the rules of origin to require more North American components to be incorporated into electric and autonomous vehicles.
In its submission, United Autoworkers proposed additions to the basic parts list to include: electric vehicle components, such as motors, AC/DC inverters, and electric drivetrain; electric vehicle battery components, such as anodes, cathodes, graphite, and nickel; and autonomous vehicle components, such as LiDAR and radar sensors, automotive cameras, and vehicle communication systems.
