- Russia's attack on Ukraine has highlighted concerns about oil dependency and petrol prices just as EV manufacturers look to deliver a wide range of greener cars, Financial Times reports.
- Ukraine is a significant producer of the miles of cables and connectors that power many cars' electrical systems. Russia's importance as the crucial rare earth minerals provider will be a significant headwind.
- Read: Russia Impact - London Metal Exchange Suspends Nickel Trading After 250% Price Spike
- An extraordinary surge in oil prices could prove to be a significant demand trigger for EVs. However, it could also cause a supply crisis.
- The global semiconductor shortage and shipping delays have affected inventory levels. Additionally, crucial components for batteries have extended lead times.
- Recently, Ford Motor Co (NYSE:F), Stellantis NV (NYSE:STLA), and Honda Motor Co Ltd (NYSE:HMC) shared ambitious plans to speed up EV production. At the same time, Tesla Inc (NASDAQ:TSLA) won permission to open a new battery factory in Europe.
- Due to the supply crisis and longer waiting times, higher prices could also discourage the new EV buyers, FT notes.
- There is also a possibility of a demand correction once the oil prices stabilize.
- Price Action: TSLA shares traded higher by 2.38% at $844 in the premarket on the last check Wednesday.
