A recent report out of China cites documentation that major battery supplier BYD intends to raise the prices of its lithium battery cells by at least 20% beginning November 1. BYD notes market changes surrounding the limits of raw materials for lithium batteries as the reason for the price hike. With global supply chains stifled, BYD will need to up the price of its battery cells to compensate for its own comprehensive price increases.
BYD Co. LTD, short for Build Your Dreams, is a Chinese manufacturing company founded in 1995. In addition to producing electronics, the company founded BYD Auto in 2003. The company has since become one of the largest manufacturers of plug-in electric vehicles in the world.
Additionally, BYD manufactures battery cell technologies and currently sits as the second-largest battery supplier in China, behind CATL.
BYD currently develops battery technologies for use around the globe, owning the complete supply chain layout from mineral to battery cells to battery packs for energy storage.
This includes its new Lithium Iron Phosphate (LFP) Blade battery packs, which Tesla was recently interested in purchasing for its EVs.
With global supply setbacks on the heels of a global pandemic, BYD is reportedly raising battery prices to account for the additional raw material costs it faces as a result.
BYD to reportedly raise lithium battery prices by at least 20%
A recent report on the company by The Securities Times cites an internal letter from BYD outlining planned increases to the price of its battery cells to correlate with growing prices for the raw materials in lithium batteries.
The letter notes market changes, as well as power and production restrictions regarding raw materials in 2021 compared to a year ago.
According to the report, the price of lithium battery cathode materials will increase by more than 200%, while the price of electrolyte and anode materials will increase by more than 150%.
This price hike, on top of hindered supply chains, means the overall cost to produce a lithium cell has increased dramatically. To adjust, the report says BYD will be taking the following action:
- The tax-included price of the product will increase by at least 20% on the basis of the current Wh unit price
- Starting November 1st, 2021 all new orders will sign a new contract that reflects the new price
- Starting November 1st, 2021 all unexecuted old contract orders will be closed/cancelled in BYD’s system
According to CnEVPost, reports out of China are still being verified, and BYD has yet to comment.
LFP batteries like BYD’s Blade modules have reportedly seen huge prices hikes this year as well, but manufacturers are more eager to eat those costs out of fear it will lose orders for the relatively nascent battery technology.
Currently, BYD mostly provides EV batteries to its own auto products, but has recently begun supply batteries to EVs like the Ford Mustang Mach-E.