EV Market Slowdown Concerns: What’s the Outlook for Battery Metals? [Real Investment Techniques]

Outlook for Lithium, Nickel, and Cobalt Prices
ESS Demand Surges, Driving Up Battery Demand
Decreasing Mineral Supply Fuels Price Increases

Despite concerns that the growth of the global electric vehicle (EV) market may slow, there are forecasts that the prices of lithium, nickel, and cobalt-key raw materials for EV batteries-will rise. This is because raw material supply is decreasing, while demand for batteries is increasing due to expanded investments in artificial intelligence (AI).

According to the financial investment industry on January 28, prices for lithium, nickel, and cobalt are expected to continue rising this year. Samsung Futures raised its target prices for lithium, nickel, and cobalt in its recently released "2026 EV Metals Outlook Update" report. The report stated, "Specifically, the price of lithium carbonate is expected to recover to $20 per kilogram this year, and cobalt is forecast to rise above $30 per pound in a bullish market. Considering that nickel prices surged by 29% within a month after a temporary halt in mine production earlier this year, the upward momentum is likely to continue."

Hana Securities also projected that the prices of these raw materials will increase. Hana Securities diagnosed, "Even if the growth of the EV market slows, battery demand will continue to rise, while raw material supply is decreasing, which will drive up mineral prices."

Raw materials such as lithium, nickel, and cobalt are used to manufacture EV batteries. While the rapid growth of the EV market had previously fueled a surge in demand for these materials, concerns emerged that raw material prices would fall as the global EV market's growth began to cool. Last September, following the elimination of EV subsidies under the U.S. Inflation Reduction Act (IRA), negative developments for the EV industry included Ford halting production of its electric pickup trucks and General Motors suspending operations at its Detroit EV plant. In addition, the Chinese government reduced the EV purchase tax exemption rate from 100% to 50% starting this year.

However, raw material prices are actually on the rise. According to the Korea Mine Rehabilitation and Mineral Resources Corporation's Korea Resource Information Service (KOMIS), the price of nickel traded on the London Metal Exchange (LME) was $18,630 per ton as of January 23, up 22.9% year-on-year. The Institute of Strategic Elements (ISE) reported that the price of lithium carbonate soared to $17.58 per kilogram, an 83.3% increase over the past year. The price of cobalt traded on the LME also more than doubled during the same period, rising from $24,270 to $55,840 per ton.

The prevailing view in the financial investment industry is that this trend will continue for the time being. Even if EV production declines, demand for batteries will be filled by energy storage systems (ESS). Experts explain that as electricity demand is growing exponentially due to investments in AI infrastructure such as data centers, demand is shifting toward ESS rather than solar power to cope with power volatility. According to Bloomberg New Energy Finance (BNEF), electricity demand driven by AI investments is expected to surge from 890 TWh in 2030 to 3,000 TWh by 2050.

The decrease in raw material supply is another factor driving up prices. For lithium, prices have been rising since August last year, when CATL, the world's largest battery manufacturer, suspended operations at its Jiangxi lithium mine, which accounts for 8% of China's total production. For nickel, the supply-demand imbalance has intensified after the Indonesian government, the world's largest producer, announced that it would cut production by 34% year-on-year in 2024. For cobalt, strict regulations such as export quotas in the Democratic Republic of Congo have reduced the volume available for export this year to just 40% of production.

Jung Hoon Jang, a researcher at Samsung Securities, commented, "With policies to expand ESS, installation demand will increase over the next two years, but supply is limited, making a rise in lithium prices inevitable. Nickel and cobalt are also experiencing unusually high price increases due to reduced supply. In particular, since lithium is highly dependent on demand from the battery industry, the potential for a sustained upward trend is also high."