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

South Korean battery makers may raise prices by 30% to 40% to offset rising commodity costs as they negotiate new long-term contracts with electric vehicle makers, according to SNE Research.

“We recently had a meeting with Korean battery companies, which led us to adjust our price outlook for electric vehicle batteries,” James Oh, executive vice president of SNE, said at a seminar on Wednesday, according to Bloomberg News. “By 2024 or 2025, battery prices are very likely to rise.”

While the companies did not disclose how much they would raise prices, Oh said companies using lithium, nickel, cobalt and manganese could raise battery pack prices by 40 percent by 2025.

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

General Motors said on Tuesday it would buy cobalt from miner Glencore for use in electric vehicles, but did not disclose the size of the deal. Glencore will supply GM with cobalt from its Murrin Murrin mine in Australia for use in GM's Ultium battery cathodes, which power the Chevrolet Silverado EV, GMC Hummer EV and Cadillac Lyriq vehicles, the two companies said in a joint statement.

Just this Monday, Ford, another major American automaker, announced that it had signed a preliminary agreement with Australian lithium mining company Lake Resources NL, which will provide Ford with 25,000 tons of lithium per year through its lithium mining project Kachi in Argentina. The agreement is not legally binding, and the two parties are still in the final negotiation on matters such as the specific delivery schedule.

Tesla CEO Elon Musk even tweeted that Tesla might get directly involved in lithium mining and refining on a large scale, as the cost of the metal, a key component in battery manufacturing, has become very high.