Chinese electric vehicle and battery manufacturer BYD will raise the price of battery products by around 20% from November 1, the company said in a letter to clients on Monday, reports Caixin. The move is further evidence that producer cost inflation is being transferred to consumer products. The costs of raw materials to produce lithium batteries has skyrocketed this year due to surging demand for electric vehicles and power-supply limits.
Lithium cobalt oxide for cathode materials more than tripled in price since December, and the price of electrolyte rose by more than 150%, leading to a significant increase in BYD’s costs, the company said. The higher prices affect new orders, and all unexecuted existing contracts will be canceled, BYD said in its letter.
BYD’s C08M lithium batteries are mainly used on the company’s own electric cars, but the price increase will include other ternary lithium batteries and lithium iron phosphate batteries that are supplied to other electric vehicle brands, analysts at CSC Financial said.