The price of key battery metals used in electric vehicle production is expected to fall in coming years

• The cost of electric vehicles battery metals is expected to drop in response to oversupply.
• The market adjustments will impact three key metals: cobalt, lithium, and nickel.

The price of battery metals used in the production of electric vehicles is expected to drop in the coming years, according to Goldman Sachs.

As first reported by Bloomberg, analysts say they expect the cost of cobalt, lithium, and nickel to decline in the next two years in response to over-investment in green energy ventures. Market corrections will drive down prices for the abundant supply of the metals, with lithium anticipated to experience the greatest adjustment.

Investors have continued to flock to the EV battery market, as the automotive industry expands its efforts into sustainable vehicles and away from gas-fueled cars. Concern over shortages of the materials in recent months — particularly amid the pandemic and Russia's invasion of Ukraine — further amplified investments for the metals, Insider's Alexa St. John reported.

While Goldman Sachs said the EV battery market will continue to thrive, analysts said "fundamental mispricing has in turn generated an outsized supply response well ahead of the demand trend," Bloomberg reported. According to McKinsey, the EV battery market is anticipated to reach $360 billion by 2030.

"Investors are fully aware that battery metals will play a crucial role in the 21st century global economy," Goldman analysts said a note on Sunday, as reported by Bloomberg. "Yet despite this exponential demand profile, we see the battery metals bull market as over for now."