Electric vehicle battery prices are falling faster, benefiting the three Korean battery companies

[비즈니스포스트] An analysis by securities firm Goldman Sachs found that the average price of electric vehicle batteries worldwide is falling at a faster rate than expected. The decline in raw material prices is believed to be the cause.

As the cost of major metal materials such as lithium, nickel, and cobalt decreases and demand for electric vehicles increases in earnest, this may have a positive impact on the three Korean battery companies, including LG Energy Solution, SK On, and Samsung SDI.

According to Electrec, an eco-friendly energy magazine, on the 21st, Goldman Sachs published a report predicting that electric vehicle battery prices will reach an average of $99 per KWh (kilowatt hour) in 2025.

Compared to the average unit price in 2022, it falls by about 40%.

Goldman Sachs originally predicted that battery prices would fall to $99 per KWh later, but advanced the forecast in this report.

By 2030, the decline in electric vehicle battery prices is expected to reach an average of 11% per year.

Goldman Sachs cited the decline in prices of metal materials such as lithium, cobalt, and nickel as the reason for the rapid decline in battery unit prices.

The unit price of materials, which account for a large portion of electric vehicle batteries, is decreasing, which is having a significant impact on price fluctuations.

Goldman Sachs predicted that this decline in unit prices could eventually lead to a reduction in the average price of electric vehicles, stimulating consumer demand and becoming an important driving force in accelerating the popularization of electric vehicles.

If these predictions come true, Korean battery companies that are among the world’s top companies, such as LG Energy Solutions, SK On, and Samsung SDI, are likely to benefit.

Korean electric vehicle battery manufacturers mainly produce ternary system (NCM) batteries, which have relatively high metal material costs. It is differentiated from LFP (lithium iron phosphate) batteries of Chinese competitors.

Ternary batteries generally have advantages in terms of driving range and weight, but the unit cost of metal materials is high, so they were forced to lose out to Chinese batteries in price competition.

However, if the prices of nickel and cobalt used in ternary batteries fall as predicted by Goldman Sachs, the company could see a relatively greater effect in reducing production costs than Chinese electric vehicle battery companies.

The fact that market expansion is accelerating due to the decline in the average price of electric vehicles is also likely to add strength to the growth of the three Korean battery companies.

Electrek said, “Interesting changes are expected in the automobile industry over the next few years,” and predicted that the rapid decline in battery prices has the potential to lead a new “electric vehicle revolution.” Reporter Kim Yong-won