SEOUL — Hyundai believes electric vehicle battery prices will level off by 2020 due to supply constraints of key ingredients, ending years of sharp declines that have helped stimulate activity in the booming sector.

Despite its cautious outlook, the South Korean carmaker and smaller affiliate Kia plan to release 38 green models using a variety of technologies by 2025, Hyundai Motor Senior Vice-President Lee Ki-sang said.

"Not a single ingredient is going in a positive direction in terms of pricing," Lee, who oversees Hyundai's green car operations, said in remarks to reporters last week that were embargoed until Wednesday.

"So far battery prices have been declining at a rapid pace, but the pace will moderate significantly or maintain the status quo by 2020."

While rivals have announced ambitious plans for electric vehicles, some analysts say Hyundai has been late to the game. It plans to launch a long-range electric vehicle next year, well behind the likes of General Motors and Tesla.

Demand for minerals such as nickel, cobalt and lithium used in electric car batteries is forecast to soar in the coming years as governments crack down on vehicle pollution and carmakers step up their investments in electric models.

Batteries are the most expensive part of electric vehicles, and their affordability is key to the take-up of the technology.

Lithium-ion battery cell prices fell about 60 percent in the five years to 2016 as larger-scale production made them cheaper to make.

In September, Reuters reported that Volkswagen was moving to secure long-term supplies of cobalt for the group's electric vehicle plans, but its talks with cobalt producers in November ended without a supply deal.

Lee said that although Hyundai saw the need to develop batteries in-house, it still relied on outside suppliers due to a lack of economies of scale to secure raw materials.

It aimed to release vehicles powered by solid-state lithium batteries by about 2020, promising greater range and safety than existing lithium-ion units.

Japanese rival Toyota also has announced a similar schedule for the development of vehicles powered by new, potentially revolutionary solid-state batteries.

In addition to hybrids and battery-powered vehicles, Hyundai was "coordinating" with Fiat Chrysler Automobiles over hydrogen cars propelled by electricity generated from fuel cells, Lee added.

Fiat Chief Executive Sergio Marchionne said on Saturday the two companies were in talks about a technical partnership in hydrogen and transmissions.

"We are not at a stage where we can discuss it publicly," Lee said.

Reporting by Hyunjoo Jin

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