Va. Shop Preps for Supply Issues from Russia-Ukraine Conflict
Mar. 11, 2022—Given that a significant amount of the materials needed to produce batteries and other parts in electric vehicles is sourced from Russia and Ukraines, one Virginia shop owner realized he needs to brace for shortages and supply loss for the long haul.
"It affects the bottom line of the automotive industry and it also affects the customer who wants to buy that electric car," Robert Hopson of Total Car Care told WTKR.
Ukraine and Russia produce and export aluminum, and raw materials like nickel and lithium.
"In the next upcoming months there will be some pivoting and some changes that are going to occur from the backlash," Hopson said.
The ever-increasing prices leave shop owners with the tough decision of eating the added cost or passing it on to consumers. Hopson intends to pass it down.
"Consumers can see a 25-35 percent increase in repairs," Hopson said.
On the other side, new car production may be affected by another commodity linked to the current conflict—palladium.
"Where most of us are going to feel this is palladium, and Russia really makes some very large palladium production in the world and it's used to make semiconductors," said Ram Gansehan, business professor at William and Mary.
Ganeshan said ongoing supply chain issues have made matters worse for auto shops dealing with the semiconductor chip shortage and that new cars may have to sit while waiting for chips. He said the industry has to be resourceful to solve the problem.
"What this will do is have companies start thinking about diversifying their sources and trying to plan for such destruction," Ganeshan said.