이 기사는 2022년 03월 15일 07:41 thebell 에 표출된 기사입니다.

The war in Ukraine and sanctions against Russia are pushing up prices for battery metals such as nickel and lithium, adding pressure to South Korean electric vehicle (EV) battery manufacturers which have seen a continued increase in their raw material costs with the rapid growth of the EV market.

Three South Korean EV battery makers – LG Energy Solution, Samsung SDI and SK On – spent about 7.3 trillion won ($5.9 billion), 4.7 trillion won and 1.3 trillion won respectively on purchasing raw materials in the first three quarters of 2021. These amounts represented 54.6%, 60.6% and 65.8% of each company’s revenue in the same period.

The share of raw material costs in the three companies’ sales has continued to increase every year. What each of them spent on raw materials in the nine months through September last year was almost equal to or exceeded the previous year’s total.

The three battery makers have raced to expand production capacity to capture share in the burgeoning EV battery market, resulting in an increase in their raw material costs. This trend is expected to continue for the time being as the competition is likely to intensify.

Unexpectedly, however, supply chain disruptions caused by the Ukraine crisis have put upward pressure on their cost of raw materials, especially nickel and lithium. Russian nickel accounts for about 10% of global supply, while in Ukraine there are large undeveloped lithium reserves.

Nickel prices reached $42,995 per ton on March 10, up 78.7% from a month ago, according to data from Korea Mineral Resource Information Service. The price of lithium carbonate also rose 23.8% to 467.5 yuan ($73.44) per kilogram in the same period.

Yet, it is likely that the impact of surging prices for these metals on the companies’ profits will be limited thanks to long-term contracts.

Additionally, the three battery makers can pass the increased cost burden onto their automaker customers as changes in raw material prices are reflected when they renew contracts every six months or yearly, according to sources in the battery industry.

What concerns them is that rising EV prices could slow the growth of the EV market, potentially affecting their performance.

Tesla, the world’s largest EV maker, raised the prices for the US Model 3 sedan by $1,000 and the China-made Model Y by 10,000 yuan earlier this month. US-based EV startup Rivian Automotive reversed its 20% price increase after the move prompted some of its customers to cancel their orders. China’s BYD reportedly increased prices of its flagship electric and plug-in hybrid models by more than 1,000 yuan last month.

“Rising raw material prices are less likely to affect South Korean battery makers in the meantime. The bigger problem is EV price hikes which could potentially have a negative impact on the overall market growth,” said an industry insider.

There is also a view that such concerns are overblown. “Rising EV prices could hurt EV sales temporarily but the shift to electrification would remain intact from a broader perspective,” another industry insider said. (Reporting by Wie-su Kim)