A letter regarding BYD’s battery price increase circulated in the market on Tuesday morning. As to the rumors, BYD insiders said that they are now verifying the information.
BYD’s contact letter on battery price increases mentioned that due to market changes and the impact of power cuts and production restrictions, compared with December 2020, the price of raw materials used for lithium batteries continued to rise in 2021, with the price of positive electrode material LiCoO2 increasing by over 200% and electrolyte prices increasing by over 150%. Meanwhile, the supply of negative electrode materials continued to be tight, resulting in a substantial increase in comprehensive costs. Shenzhen BYD Lithium Battery Co., Ltd., therefore, decided to raise the unit price of battery products such as CO8M.
The letter also showed the specific price adjustment plan for BYD batteries. First, the price of products (including tax) will increase by no less than 20% on the basis of the current Wh unit price. The specific model and price refer to the new quotation. Second, from November 1, 2021, all new orders will sign new contracts with new prices. Third, from November 1, 2021, all unfinished previous contract orders will be closed and cancelled uniformly by the company’s system.
BYD’s battery-supplied automobile firms include Chinese luxury car brand Hongqi. Insiders at Hongqi refused to comment on the matter.
Since 2020, with the rapid development of new energy vehicles, the prices of raw materials such as cobalt, used in lithium batteries, have soared. Data show that as of October 8 this year, the price of domestic cobalt has risen from a low of less than 240,000 yuan ($37,609) per ton in April last year to over 380,000 yuan per ton, an increase of nearly 60%.
In addition to cobalt, other raw materials of lithium-ion batteries have also increased sharply since the fourth quarter of last year, such as lithium carbonate, lithium hydroxide, and some solvents and additives, which has driven the prices of cathode materials and electrolytes of lithium-ion batteries to rise by varying degrees.