SNE Research: South Korean battery manufacturers may raise prices by 30% and 40% in the next few years

South Korean battery makers are likely to raise prices by 30 to 40 per cent to offset higher commodity costs and are in talks with electric carmakers over new long-term contracts, according to SNE Research.

"We recently held a meeting with South Korean battery companies to adjust the price outlook for electric vehicle batteries," James Oh, executive vice president of SNE, said at the seminar on Wednesday, according to Bloomberg News. Battery prices are very likely to rise by 2024 or 2025. "

James Oh said that while the companies did not say how much they would raise prices, companies using lithium, nickel, cobalt and manganese could raise the price of battery packs by 40 per cent by 2025.

On the vehicle side, due to supply chain disruptions, global automakers are scrambling to stock up on key raw materials for electric vehicle batteries. Today, the prices of rare metals such as lithium, nickel and cobalt have soared to multi-year highs.

General Motors said Tuesday it would buy cobalt from miner Glencore to make electric cars, but did not disclose the scale of the deal. Glencore will supply GM with cobalt from its Murrin Murrin mine in Australia, which will be used in GM's Ultium battery cathode to power Chevrolet Silverado EV, GMC Hummer EV and Cadillac Lyriq cars, the two sides said in a joint statement.

On Monday, Ford, another big U.S. carmaker, announced a preliminary agreement with Australian lithium miner Lake Resources NL, which will supply Ford with 25000 tons of lithium a year through its lithium mine project in Argentina, Kachi. The agreement is not legally binding and the two sides are still in final negotiations on matters such as a specific delivery schedule.

Tesla CEO Musk even said on Twitter that Tesla may be directly involved in lithium mining and refining on a large scale, as the cost of metal, a key component of making batteries, has become very high.