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Raw material costs for electric vehicles more than doubled during the coronavirus pandemic, according to a new report Wednesday by AlixPartners.
The cost increase is being led by materials such as cobalt, nickel and lithium – all essential for the production of batteries used to power the electric cars and trucks.
Automakers from General Motors and Tesla to start-ups like Lucid and Rivian have significantly raised prices on new vehicles.

Workers inspect a Rivian R1T electric vehicle (EV) pickup truck on the assembly line at the company’s manufacturing facility in Normal, Illinois, US., on Monday, April 11, 2022.
Jamie Kelter Davis | Bloomberg | Getty Images

Raw material costs for electric vehicles more than doubled during the coronavirus pandemic, according to a new report Wednesday by AlixPartners, forcing automakers from General Motors and Tesla to start-ups like Lucid and Rivian to significantly raise prices on new vehicles.
Average raw material costs for an EV totaled $8,255 per vehicle as of May, up 144% from $3,381 per vehicle in March 2020, led by materials such as cobalt, nickel and lithium – all essential for the production of batteries used to power electric cars and trucks. EV-specific costs have increased to $4,500 from roughly $2,000 in the past two years, according to AlixPartners.

The cost increases aren’t limited to EVs: Raw material costs for traditional vehicles with internal combustion engines have also more than doubled during that time period to $3,662 per vehicle, up 106% from an average of $1,779 per vehicle in March 2020. That uptick is being led by increases in steel and aluminum.

The cost spikes come as automakers aggressively launch new EVs over the next several years. AlixPartners predicts the number of EV models available on the global market to increase from 80 last year to more than 200 by 2024.
As a result, AlixPartners expects the higher costs to force a relative slowdown in EV launches, as automakers move away from pushing electric vehicles to market as quickly as possible and refocus on profitability.

Ford Motor CFO John Lawler last week said rising commodity costs have wiped out the profit it initially expected to make on its electric Mustang Mach-E. While the vehicle was profitable when it was first launched in late 2020, he said that’s no longer the case.
In the meantime automakers are raising prices for buyers.

GM on Friday announced it would hike the price of its electric Hummer by $6,250. The automaker blamed higher prices for parts, technology and logistics. Tesla, Rivian, Lucid and others previously announced notable increases in the starting costs of their EVs.
— CNBC’s John Rosevear contributed to this article.

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Mars CEO Grant Reid is retiring after more than eight years in the role.
Poul Weihrauch, the global president of Mars Petcare, will succeed him at the end of September.
Mars’ board said Reid oversaw more than 50% growth in sales during his tenure.

Grant Reid, president and chief executive officer of Mars Inc., speaks during a Bloomberg Businessweek Debrief event in New York, U.S., on Thursday, Jan. 10, 2019.
Alex Flynn | Bloomberg | Getty Images

Mars CEO Grant Reid is retiring after more than eight years in the role and will be replaced by the head of the company’s pet care business.
Poul Weihrauch, the global president of Mars Petcare, will succeed him at the end of September, the company said Wednesday. Mars said that Reid informed the board of his decision 18 months ago and will remain at the candy giant until the end of the year.

Mars, based in McLean, Virginia, is privately held and has a portfolio of brands that includes Snickers, Kind bars and pet food names Pedigree and Whiskas.
Weihrauch joined the company in 2000 as the European brand leader for Snickers and led Mars Food business before becoming the global president of Mars Petcare in 2014, the company said.
During Reid’s tenure, Mars said revenue rose by more than 50% and that the number of employees more than doubled from 60,000 to over 140,000. He also guided expansions into veterinary services and healthier snacks, the company said.
Reid plans to devote more time to his work on climate action and sustainability upon retirement, it added.

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U.K. health authorities have said they are urgently investigating a rare polio virus outbreak in sewage samples in London.
Wastewater surveillance in east London discovered a number of samples had tested positive for vaccine-derived polio virus between February and May, the UKHSA said Wednesday.
It marks the first re-emergence of the virus since Britain was declared polio-free in 2003.

U.K. health authorities have said they are “urgently” investigating a rare poliovirus discovery in sewage samples in London.
Picture Alliance | Getty Images

U.K. health authorities have said they are urgently investigating a rare polio virus discovery in sewage samples in London, potentially putting Britain’s polio-free status at risk for the first time in almost two decades.
A number of waste samples from the Beckton sewage treatment works in Newham, east London tested positive for vaccine-derived polio virus between February and May, the U.K. Health Security Agency said Wednesday.

The virus has since continued to evolve and is now classified as a “vaccine-derived” polio virus type 2, the UKHSA said, adding that it is looking to establish if any community transmission is occurring.
The agency has declared a national incident and informed the World Health Organization of the situation.
“We are urgently investigating to better understand the extent of this transmission and the NHS has been asked to swiftly report any suspected cases to the UKHSA, though no cases have been reported or confirmed so far,” Dr. Vanessa Saliba, consultant epidemiologist at UKHSA, said Wednesday.
Polio is a rare virus that can occasionally cause serious illness, such as paralysis, in people who are not fully vaccinated. The disease was previously common in the U.K. in the 1950s, but the country was declared polio-free in 2003.
The UKHSA said the risk to the general public is extremely low, but urged parents to ensure their children have been fully immunized against the disease. It is common practice in the U.K. for children to receive an inactivated polio vaccine as part of their routine vaccination program; with three shots given before the age of one and another shot given at ages three and 14.

“Most of the U.K. population will be protected from vaccination in childhood, but in some communities with low vaccine coverage, individuals may remain at risk,” Saliba said.
Each year, it is usual for one to three “vaccine-like” polio viruses to be detected in Britain’s sewage system.
Such detections have always been one-off findings, and have previously occurred when an individual vaccinated overseas with the live oral polio vaccine returned or traveled to the U.K. and briefly “shed” traces of the vaccine-like polio virus in their feces.
However, this marks the first time a cluster of genetically-linked samples has been identified repeatedly over several months.

Vaccination status

Scientists say that this suggests there has been some community spread between closely-linked individuals in north and east London.
So far, the virus has only been detected in sewage samples, and no associated cases of paralysis have been reported, according to the UKHSA.
While vaccination against polio is commonplace in the U.K., immunization rates vary across the country, with communities with lower uptake at greater risk.
Vaccine coverage for childhood vaccines, in particular, has waned nationally and especially in parts of London over recent years.
The U.K.’s National Health Service said parents should contact their doctor’s surgery to check their child’s vaccines are up to date.
“The majority of Londoners are fully protected against Polio and won’t need to take any further action, but the NHS will begin reaching out to parents of children aged under 5 in London who are not up to date with their Polio vaccinations to invite them to get protected,” Jane Clegg, chief nurse for the NHS in London, said.
“Meanwhile, parents can also check their child’s vaccination status in their Red Book and people should contact their GP surgery to book a vaccination, should they or their child not be fully up to date,” she added.
In 2004, Britain switched from using an oral polio vaccine to an inactivated polio vaccine, which is administered via injection and prevents infection.
Generally, those who do become infected with polio display no symptoms, though some can develop a flu-like illness up to three weeks later. In rarer cases, the virus can attack nerves in the spine and base of the brain, potentially leading to paralysis. On occasion, it can attack muscles used for breathing, which can be fatal.
Medical professionals said the early detection of the virus would be important for monitoring its spread and preventing more severe cases.
“In populations with low vaccine uptake it is possible that the live polio vaccine can spread from one person to another. If this is sustained, over time (one or two years) this vaccine derived virus can mutate to become fully virulent again and can start to cause paralysis in people who have not been vaccinated,” said Paul Hunter, professor of medicine at the University of East Anglia.

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Daimler Truck’s CEO told CNBC on Wednesday that shortages of parts are slowing the production of thousands of its vehicles.
Martin Daum, an industry veteran, said the squeeze is among the worst he’s seen in his more than 25-year career.
Inflationary pressures, too, are weighing heavily on Daimler Truck’s production, as the costs of energy and raw materials are now significantly higher.

Supply chain disruptions are still rippling across the globe, and the head of the world’s largest truck maker has warned that parts shortages are slowing the production of thousands of its vehicles.
Daimler Truck CEO Martin Daum told CNBC on Wednesday that the current supply chain squeeze is among the worst he’s seen in his more than 25-year career, resulting in major bottlenecks across the company’s suite of brands.

“We are facing enormous pressure on the supply chain,” said Daum, whose trucks are used for other vital industries such as logistics and construction.
“I would say it’s one of the worst years ever in my long career in trucking, where we sometimes have to touch a truck three, four times to add the missing parts,” he added.
The Mercedes-Benz Truck maker said earlier this month that there were signs that a prolonged chip shortage appeared to be easing. Microchips, or semiconductors, are a critical component of modern auto manufacturing, and they fell into short supply during the height of the Covid-19 pandemic and resultant factory closures.
But Daum said that shortages of other parts are also continuing to slow the production of thousands of trucks across its international network of factories.
“We have, in a couple of factories, more than 10,000 trucks where one or two parts are missing and we desperately search the world for those parts,” he said.

Supply chain disruptions are causing a production backlog at the world’s largest truckmaker, Daimler Trucks.
Bloomberg | Getty Images

Inflationary pressures, too, are weighing heavily on Daimler Truck’s production, as the costs of energy and raw materials are now significantly higher — with some price hikes easier to pass on than others.
“We are, at the moment, pushing those price increases on the raw materials side through, so we can at least hold our margins in that business,” he said. The company is also in negotiations over employee pay raises.
Still, the truck manufacturer, whose other brands include Freightliner, Western Star and Fuso, noted some bright spots. In the United States alone, Daum said, it sees pent-up demand for some 200,000 trucks as it continues to catch up with supply shortfalls through 2020 and 2021.
“That, in my opinion, makes me optimistic that we will see a not too bad 2023. And not too bad is a German expression for it could be a good 2023,” he said.
Daimler Truck last month reported an 8% year-over-year increase in first-quarter sales, with group revenue up 17% over the same period.

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Jackpot is looking to grow the U.S. lottery business by putting it online.
The company has raised money from top sports executives, and NBA superstars James Hardin and Joel Embiid and NHL great Martin Brodeur round out some of the big name investors.
The platform hopes to attract a new, younger demographic.

Courtesy: Jackpot

Online lottery ticket company Jackpot announced Wednesday that it closed on $35 million in series A funding, led by some of the biggest names in sports who see the promising growth potential in digital lottery sales.
The cash infusion could enable Jackpot to start rolling out its website and app later this year in select locations where online lottery ticket sales are allowed. For example, the company said it could operate in states including New York, New Jersey, Texas, Ohio and Oregon.

Funding for the round was led by Accomplice Ventures, a venture capital firm co-founded by DraftKings board member Ryan Moore and Courtside Ventures, an early-stage investor in sports, digital media, fitness and gaming businesses. Also among the investors: the Kraft Group, which owns the New England Patriots; the Haslam Sports Group, which owns the Cleveland Browns; Fanatics CEO Michael Rubin; DraftKings CEO Jason Robins; and Boston Red Sox president Sam Kennedy. NBA superstars James Hardin and Joel Embiid and NHL great Martin Brodeur round out some of the big name investors.
“What we are doing is really just allowing you to buy that lottery ticket without ever leaving your couch,” Akshay Khanna, Jackpot co-founder and CEO of North America, told CNBC in an interview.
The $100 billion-a-year lottery business is still mostly cash-based, with buyers getting tickets at bodegas, convenience stores, gas stations and other locations.
Jackpot, which says it wants to transform the business to be more in sync with the online buying habits of today’s consumers, will make its money by charging a convenience fee on purchases. The company added that it’s currently working with local regulators in select states for clearance to roll out the service.
“Over a dozen states have been incredibly receptive to this because they’ve realized that this is actually a fundamentally different channel for the same product,” said Khanna.

In 2021, Jackpot said its research shows 53% of Americans bought lottery tickets but that only about 5% of those were purchased online. Khanna said that making the lottery tickets more widely accessible online will help increase sales revenue for states.
“We certainly think this will appeal to a potentially younger and more diverse demographic,” Khanna said. “It’s one of the reasons why states that are supportive of this model, because one of the goals here is to expand this product to people who maybe traditionally would not have been those that purchase lottery tickets.”
But some critics, like the National Council on Problem Gambling, warn that making access to buy lottery tickets easier could present a slippery slope for at-risk individuals.
“Any form of online gambling inherently gives the user a sense of anonymity and is much easier to hide than other forms of gambling,” said Jaime Costello, the group’s director of programs, in an email. “These characteristics, paired with the instant access to purchasing, results, etc., increase the risk of problems for individuals purchasing lottery tickets online.”
Khanna said Jackpot will have age verification controls and that the company is investing in order to comply with state regulations.

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Mortgage applications to purchase a home rose 8% last week compared with the previous week, bolstered in part by demand for adjustable-rate mortgages, according to the Mortgage Bankers Association.
A big jump in mortgage rates may have actually spurred homebuyer demand, perhaps as consumers worried rates would move even higher.
“The average loan size, at just over $420,000, is well below its $460,000 peak earlier this year and is potentially a sign that home price-growth is moderating,” said Joel Kan, an economist for the MBA.

Mortgage applications to purchase a home rose 8% last week compared with the previous week, bolstered in part by demand for adjustable-rate mortgages, according to the Mortgage Bankers Association’s seasonally adjusted index. Applications were, however, 10% lower than they were in the same week one year ago.
A big jump in mortgage rates may have actually spurred homebuyer demand, perhaps as consumers worried rates would move even higher. Mortgage rates surged to the highest level since 2008, while making their biggest one-week jump last week in 13 years.

Meanwhile the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.98% from 5.65%, with points rising to 0.77 from 0.71 (including the origination fee) for loans with a 20% down payment. Rates are now nearly double what they were one year ago.
Read more: Sales of existing homes fell in May
“Purchase applications increased for the second straight week – driven mainly by conventional applications – and the ARM share of applications jumped back to over 10%,” wrote Joel Kan, an MBA economist. “The average loan size, at just over $420,000, is well below its $460,000 peak earlier this year and is potentially a sign that home price-growth is moderating.”
Adjustable-rate mortgages offer lower interest rates and can generally be fixed for terms of five, seven or 10 years. While these loans are considered riskier, because they have the potential to adjust to higher or lower rates, they are underwritten much more strictly than they were during the last housing boom more than a decade ago that eventually led to an epic housing crash.
Buyer demand may also be increasing because the supply of homes for sale is finally growing. Active inventory nationwide is now up 17% year over year according to Realtor.com. Homes are now selling faster than they were a year ago.
Applications to refinance a home loan fell 3% for the week and were 77% lower than the same week one year ago. The refinance share of mortgage activity decreased to 29.7% of total applications from 31.7% the previous week.

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The latest version of the International Energy Agency’s World Energy Investment report said clean energy investment is set to exceed $1.4 trillion this year and account for “almost three-quarters of the growth in overall energy investment.”
While the agency welcomed this, it pointed to the huge amount of work that lies ahead.
“We cannot afford to ignore either today’s global energy crisis or the climate crisis, but the good news is that we do not need to choose between them — we can tackle both at the same time,” said the agency’s executive director, Fatih Birol.

Coal and a wind turbine in Hohenhameln, Germany, on April 11, 2022. A number of major economies have formulated plans to reduce their reliance on Russian hydrocarbons in recent months.
Mia Bucher | Picture Alliance | Getty Images

Global energy investment is on course to jump by more than 8% in 2022 and hit $2.4 trillion, with a notable uptick for coal supply chains, but far more money will be required if climate-related goals are to be met, according to the International Energy Agency.
Published Wednesday, the latest version of the IEA’s World Energy Investment report said clean energy investment is set to exceed $1.4 trillion this year and account for “almost three-quarters of the growth in overall energy investment.”

While the agency welcomed this, it pointed to the huge amount of work that lies ahead.
“The annual average growth rate in clean energy investment in the five years after the signature of the Paris Agreement in 2015 was just over 2%,” it said.
Since 2020, that rate had grown to 12%. The IEA described that as “well short of what is required to hit international climate goals, but nonetheless an important step in the right direction.”
The IEA’s executive director, Fatih Birol, highlighted the challenges and opportunities the planet faces, given the current situation.

Read more about energy from CNBC Pro

“We cannot afford to ignore either today’s global energy crisis or the climate crisis, but the good news is that we do not need to choose between them — we can tackle both at the same time,” he said.

Birol added that a “massive surge in investment to accelerate clean energy transitions” is “the only lasting solution.”
“This kind of investment is rising, but we need a much faster increase to ease the pressure on consumers from high fossil fuel prices, make our energy systems more secure, and get the world on track to reach our climate goals.”

Unevenly distributed spending

While the investment was welcomed, a statement accompanying the IEA’s report noted that the increase in clean energy spending is unevenly distributed, with advanced economies and China accounting for the majority.
On top of this, it said some markets are seeing high prices and concerns related to energy security are prompting “higher investment in fossil fuel supplies, most notably on coal.”
According to the IEA’s report, 2021 saw roughly $105 billion invested what it called the “coal supply chain.” That represented a rise of 10% compared with 2020. It’s forecasting that the industry will likely follow a similar path this year.
“Global coal supply investment is expected to grow by another 10% in 2022 as tight supply continues to attract new projects,” it said. “At over USD 80 billion, China and India are anticipated to make up the bulk of global coal investment in 2022.”
The U.S. Energy Information Administration lists a range of emissions from the combustion of coal. These include carbon dioxide, sulfur dioxide, particulates and nitrogen oxides.
Greenpeace, for its part, has described coal as “the dirtiest, most polluting way of producing energy.”

Challenging global environment

The IEA’s report comes at a time of rising inflation, a sustained surge in oil and gas prices, and geopolitical tensions related to the Russia-Ukraine war.
Those factors have created a hugely challenging environment for businesses, governments and consumers. The energy sector is no different.
“Almost half of the additional USD 200 billion in capital investment in 2022 is likely to be eaten up by higher costs, rather than bringing additional energy supply capacity or savings,” the IEA said.
It added that the costs of solar panels and wind turbines — technologies crucial to the energy transition — are now “up by between 10% and 20% since 2020” after a period of decline.
People around the world are also feeling the pinch: The total energy bill for consumers in 2022 looks set to exceed $10 trillion for the first time, the IEA’s report said.  

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“High prices are encouraging some countries to step up fossil fuel investment,” the report stated, “as they seek to secure and diversify their sources of supply.”
A number of major economies have formulated plans to reduce their reliance on Russian hydrocarbons in recent months, which has in turn led to some challenging situations.
In Europe, for example, reduced flows of Russian gas and the specter of a full supply disruption have prompted some governments to consider a return to coal.
Germany, Italy, Austria and the Netherlands have all indicated coal-fired plants could be used to compensate for a cut in Russian gas supplies.
—CNBC’s Sam Meredith contributed to this report More

Chinese companies that produce raw materials for electric vehicle batteries show signs of using forced labor, according to a report from The New York Times.
Xinjiang Nonferrous Metal Industry is a company that produces minerals and metals, including lithium, nickel and copper. It has exported metals to the U.S., Germany, U.K., Japan and India, the Times reported.
The report was published on the eve of the Uyghur Forced Labor Prevention Act taking effect in the United States. The legislation bans goods made with forced labor in Xinjiang from entering the U.S. market.

Hundreds of Uyghurs are working for a mining conglomerate that produces raw materials for electric vehicles as part of a so-called work transfer program in China, the New York Times reported.
Shen Longquan | Visual China Group | Getty Images

Chinese companies that produce raw materials for electric vehicle batteries show indications of using forced labor, according to a report from The New York Times.
The newspaper reported that mining conglomerate Xinjiang Nonferrous Metal Industry employs hundreds of Uyghurs, an ethnic minority in China, as part of a so-called work transfer program.

The Times reported China has acknowledged running such a program that moves Uyghurs and other ethnic minorities from the south of Xinjiang to the north to work in industrial jobs.
The Chinese embassy in Washington did not immediately respond to a CNBC request for comment.
The U.S. State Department previously noted, citing an independent researcher, that transferred workers are at risk of being subjected to forced labor. It has also previously cited Chinese academic publications that “described labor transfers as a crucial means to fragment Uyghur society and mitigate the ‘negative’ impact of religion.”
In social media posts translated by the Times, Xinjiang Nonferrous said workers from mostly Muslim minorities were lectured on “eradicating religious extremism” and becoming workers who “embraced their Chinese nationhood.”
Chinese authorities have repeatedly denied that the country imprisons or enslaves Uyghurs. On Tuesday, Chinese Foreign Ministry spokesperson Wang Wenbin said the claims of forced labor in Xinjiang are a “huge lie made up by anti-China forces to denigrate China.” He said the rights of workers of all ethnic groups in Xinjiang are duly protected.

Xinjiang Nonferrous Metal Industry produces minerals and metals, including lithium, nickel and copper. It has exported metals to the United States, Germany, U.K., Japan and India, the Times reported. It’s unclear whether these relationships are ongoing, however, the New York Times reported.
The report was published on the eve of the Uyghur Forced Labor Prevention Act taking effect in the United States. The legislation bans goods made with forced labor in Xinjiang from entering the U.S. market.
The Times reported that thousands of companies could have some link to Xinjiang in their supply chains. If fully enforced, many products, including some needed for electric vehicles, may be stopped at the border.
Read the full report in the New York Times.

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