The nickel, though valued at only five cents, has become one of the most expensive coins for the United States Mint to produce. In recent years, the cost of manufacturing each nickel has consistently exceeded its face value, creating a paradox in the nation’s currency system. Reports from the Mint show that in 2024 and 2025, each nickel cost between 13.78 and 14 cents to produce, nearly three times its worth. This imbalance is not a minor inconvenience—it represents millions of dollars in losses annually, raising questions about the practicality of continuing to mint the coin in its current form.

The primary reason for this high cost lies in the nickel’s metal composition. Modern nickels are made of 75% copper and 25% nickel, a blend chosen in the 19th century to replace silver and provide durability. At the time of its introduction in 1866, this alloy was practical and affordable. Today, however, global markets have driven up the prices of both copper and nickel, making the coin disproportionately expensive to produce. Because the nickel is larger and heavier than the penny or dime, it requires more raw material, magnifying the impact of rising commodity costs. In fact, about 80% of the total production cost comes directly from the metals themselves, with the remainder covering labor, energy, and distribution.

This imbalance has significant financial consequences. In 2024 alone, the Mint reported a $17.7 million loss from nickel production, even after reducing losses from the previous year, when they reached over $90 million. These figures highlight how the nickel, alongside the penny, has become a drain on government resources. While larger coins like the quarter and dollar are profitable to produce, the nickel’s inefficiency stands out as a persistent problem.

Historically, the Mint has adapted coin compositions during times of crisis. During World War II (1942–1945), nickels were temporarily made of copper, silver, and manganese to conserve nickel for the war effort. These “war nickels” are now prized by collectors, but they also serve as a reminder that coinage can and does change when economic or political circumstances demand it. Today, similar discussions are underway about whether to alter the nickel’s alloy once again, perhaps replacing it with cheaper metals or even discontinuing the coin entirely.

The debate over the nickel’s future is not purely economic. Many argue that the coin still plays a vital role in everyday transactions, particularly in vending machines, parking meters, and coin‑operated devices that rely on its size and weight for recognition. Others point out that inflation has eroded the purchasing power of five cents to the point where the nickel is no longer essential. With the penny officially discontinued in November 2025, the nickel has become the next logical target for reform. Policymakers must weigh tradition, practicality, and cost efficiency in deciding whether the nickel should remain part of the nation’s currency system.

In the end, the nickel’s production cost tells a larger story about the challenges of maintaining physical currency in a modern economy. Rising metal prices, inflation, and the shift toward digital transactions all contribute to the coin’s declining relevance. Yet the nickel endures as a symbol of continuity, a reminder of Jefferson’s legacy, and a tangible link to America’s monetary past. Whether it survives future reforms or joins the penny in retirement, the nickel’s story illustrates the tension between tradition and practicality in the evolution of money.