EVs Were Meant to Bypass Oil. Now They’re Stuck at the Strait of Hormuz

Key Takeaways

• Gulf aluminum shipments halted by Strait of Hormuz closure
• Toyota, Nissan cut production by ~40,000 EVs
• Low‑carbon aluminum grades scarce, raising costs
• Shipping reroutes add up to 49 days transit
• EV battery sulfur supply also disrupted, may raise prices

Summary

Electric vehicles rely heavily on Gulf‑sourced aluminum, but the U.S.–Iran conflict has blocked the Strait of Hormuz, forcing major smelters in Bahrain and Qatar to cut or halt output. Toyota and Nissan have already trimmed production by roughly 40,000 units, while other OEMs face shortages of low‑carbon, solar‑powered aluminum grades essential for meeting emissions standards. Rerouted shipments now travel around Africa, adding up to 49 days to delivery times and inflating costs. The disruption also threatens sulfur supplies for EV batteries, potentially raising overall vehicle prices.

Pulse Analysis

The current Middle East tension has exposed a hidden vulnerability in the electric‑vehicle supply chain: reliance on Gulf‑origin aluminum. While EVs contain about 40 % more aluminum than conventional cars, roughly 70 % of that metal for Japanese manufacturers comes from the region. The closure of the Strait of Hormuz forced Bahrain’s Alba smelter to slash output by 19 % and Qatar’s Qatalum to stop production entirely, creating an immediate shortfall of a critical, low‑carbon alloy used in vehicle frames, battery housings, and heat‑management systems.

Beyond the raw material shortage, logistics have become a costly nightmare. Vessels that once crossed the Hormuz corridor now detour around the Cape of Good Hope, extending transit from two‑three weeks to nearly two months. This adds roughly 49 days to delivery schedules and forces shippers to rely on overland trucking to ports like Sohar and Jeddah, which lack the capacity to match sea‑lane volumes. Consequently, benchmark aluminum prices on the London Metal Exchange have surged past $3,500 per metric ton, with forecasts edging toward $3,700 if the impasse persists.

For automakers, the ripple effects are both operational and strategic. Immediate actions include trimming production schedules, as seen with Toyota and Nissan, and exploring alternative alloys, albeit with lengthy recertification processes. Longer‑term, the crisis is accelerating a shift toward diversified sourcing and built‑in supply‑chain resilience, prompting OEMs to reconsider the geographic concentration of critical inputs. Simultaneously, higher oil prices may improve the total cost of ownership for EVs, potentially offsetting some of the added material costs and keeping consumer demand intact.