Collapsing lithium prices are expected to put more pressure on Korean battery companies that are already reeling from an electric vehicle chasm, industry insiders said Wednesday.

According to a recent Goldman Sachs report, the global lithium price is projected to fall by 18 percent from the monthly average price of $12.70 per kilogram in August to $10.40 next year. The price would be an 84.1 percent drop compared to the lithium boom in 2022 and on a similar level to 2015, when automakers just started to launch EVs such as Tesla’s Model 3, sources said.

The downward spiral of the key mineral for the cathode in EV batteries comes as the new wave of supply is exceeding the softening demand for EVs.

The lithium bust cycle could mean that EVs will likely reach “price parity” when the battery price falls below $100 per kilowatt-hour. At that stage, the price of electrified vehicles would be the same as internal combustion engine cars even without government subsidies, potentially leading to a surge in EV demand.

But battery companies say the lithium price is declining too fast, posing a downside risk to their business performance.

Because their supply prices are tied to lithium prices under contracts with carmakers, they have no other option but to lower their prices.

“The lithium price drop is another hurdle for us. We are already burdened with automakers’ trying to delay their electrification goals,” a battery company official said on the condition of anonymity. “On top of that, many carmakers refused to lower their EV prices even though they buy battery cells at cheaper prices. This trend is far from reaching price parity for EVs.”

“Our company is looking to take countermeasures by cutting costs and pursuing more efficient inventory management strategies,” another industry insider noted. “But we hope in the long run, price adjustment in battery cells could lead to bigger market share for EVs.”

This year, the nation’s battery trio – LG Energy Solution, Samsung SDI and SK On – are already facing a bumpy road. From January to July, LG Energy Solution and Samsung SDI saw their operating profits plunge 68 percent and 33.7 percent, respectively, compared to a year ago. SK On posted operating losses worth almost $60 million during the same period.

Amid a gloomy outlook in the coming months, experts have called for the government to take aggressive protectionist measures.

“Korean battery-makers are at a critical juncture,” said Lee Ho-geun, a car engineering professor at Daeduk University. “More protective measures such as tax benefits should be considered so that they can enhance their readiness to take on cheaper China-made batteries.”