Goldman Sachs "Electric Vehicle Battery Prices to Rise 18%"

Source: CNBC, Steve Fecht/ General Motors

[Asia Economy Reporter Yujin Cho] An analysis has emerged predicting that the price of electric vehicle batteries will surge by 18% due to the global increase in demand for electric vehicles.

According to the US economic media CNBC on the 23rd (local time), Goldman Sachs stated in a report published on the 18th that the rising demand for electric vehicles will cause an increase in the prices of battery raw materials, forecasting such a trend.

Goldman Sachs specifically predicted that battery prices will rise by about 18%. Considering that batteries account for approximately 20-40% of the cost of electric vehicles, this price increase is expected to impact the profitability structure of electric vehicle manufacturers.

The report did not provide specific price targets for battery raw materials but anticipated that the prices of key raw materials such as lithium and cobalt will more than double. Nickel prices are expected to rise by about 60%.

The report noted that prices of key materials for electric vehicles have started to increase since early this year, and considering this situation, some countries with plans to foster the electric vehicle industry may implement policies to increase stockpiles of raw materials to stabilize prices.

In particular, due to the limited availability of nickel resources, the report expects an acceleration in the shift to other types of batteries such as lithium iron phosphate (LFP). Lithium iron phosphate batteries have the advantages of being cheaper and less flammable as they do not use nickel or cobalt.

Electric vehicle manufacturers with a high adoption rate of lithium iron phosphate batteries include Tesla and China's Xiaopeng.

The report also stated, "If nickel prices soar to an all-time high of $50,000 per ton, the price per electric vehicle could increase by $1,250 to $1,500, which may negatively affect electric vehicle demand."

It added, "The tipping point for consumers to switch from internal combustion engine vehicles to electric vehicles will be possible when battery prices have sufficiently decreased," and forecasted that "by around 2030, battery costs will be lower than those of internal combustion engine vehicles."

This content was produced with the assistance of AI translation services.