The cost of lithium compounds used in the production of batteries increased fivefold over the year, and in November alone it increased by 24.3%. Lithium reserves are concentrated in South America and Australia, but Chinese companies buy local raw materials for further processing and supply to foreign markets, so they have the opportunity to determine the pricing policy almost on a global scale. Directly, the reserves of lithium in China do not exceed 5–6% of the world, but in the supply chain of related raw materials, the country controls at least 60% of the market.

In the case of South Korea, Chinese companies are also supplying other minerals required for the production of lithium batteries. Cobalt prices have tripled over the year, and the cost of a ton of nickel for the first time since May 2014 in November exceeded $ 20,000.

Korean battery manufacturers, which are gaining more and more influence in the global market, are forced to rely on Chinese raw materials. Samsung SDI already had to raise the price of its cylindrical lithium batteries by 8% in November. LG Energy Solution will increase the cost of 21700 units by 10% from January in an attempt to offset the recent surge in commodity prices.

It is expected that we can see 50-70% inflation YoY in 2022 alone.