South Korean battery manufacturers may raise prices by 40% in the next two years

South Korean battery makers are likely to raise prices by 30 to 40 per cent to offset high commodity costs and are negotiating new long-term contracts with electric carmakers, market research firm SNE Research said on April 13.

"We recently held a meeting with South Korean battery manufacturers, which led us to adjust our price forecasts for electric vehicle batteries." "Korean battery manufacturers have revealed that battery prices are very likely to rise by 2024 or 2025," James Oh, executive vice president of SNE, said at a seminar. "

Oh told Bloomberg on the sidelines of the meeting that while South Korean battery makers did not say how much they might raise prices, companies that use lithium, nickel, cobalt and manganese could raise the price of battery packs by 40 per cent by 2025.

According to SNE Research, the average price of lithium-ion battery packs for electric vehicles in 2021 will be between $147 and $153 per kilowatt-hour. Battery prices account for 30% and 40% of the price of electric vehicles.

Jay Kim, vice president of new energy at LG, also said at the meeting that the rise in lithium prices has also affected solid-state batteries using sulphide electrolytes. "compared with other types of solid-state batteries, sulphide electrolyte solid-state batteries are very expensive and require a lot of lithium. The price of vulcanized electrolytes is likely to double that of last year. " Kim also revealed that LG laboratories in South Korea and the United States are working to commercialize sulphide electrolyte solid-state batteries by 2030.

Oh also revealed that "global automakers believe that square batteries are safer, so they are urging South Korean battery partners to replace their current soft package batteries with square batteries." Oh said that Volkswagen Group is one of them, and its partner SK On may announce the square battery plan soon.

Samsung SDI is the only battery manufacturer in South Korea with square battery manufacturing technology. Lee Tae Kyung, vice president of Samsung SDI, said at the meeting that "soft-bag batteries bulge more easily than square batteries, so you should be very careful when handling them."