Wednesday, July 24, 2024
BusinessBYD Rumored to Supply Tesla With Lithium-Iron-Phosphate Batteries

BYD Rumored to Supply Tesla With Lithium-Iron-Phosphate Batteries

Chinese media outlet Cailian Press on Thursday reported that Tesla’s preference for lithium-iron-phosphate (LFP) batteries released in the company’s third quarter report has once again triggered market speculation about the firm’s battery suppliers.

In the third quarterly report of 2021 released previously, Tesla said that the standard range versions of Model 3 and Y are gradually being adjusted to be equipped with LFP batteries. The adjustment involves the global market, while the long-range version models will continue to use ternary lithium batteries.

According to the media report, “Tesla’s statement means that LFP batteries will be used in the standard range version Model 3 and Y produced in its American factory and future European factory. Combined with previous market news, BYD, which has built a factory in the United States, has a better chance of winning the supply orders.” According to sources close to BYD, the firm’s supplying Tesla with batteries has almost been confirmed. Regarding this news, BYD “declined to comment.”

According to the source, Tesla’s approval of LFP battery technology may be aimed at reducing the cost of automotive parts without raising the price of vehicles, so as to further improve the profit margin of vehicles and provide consumers with a different choice. The financial report shows that in the third quarter of 2021, Tesla achieved revenue of $13.76 billion, a year-on-year increase of 57%, while the market expected $13.914 billion. The company’s adjusted net profit was $1.618 billion, up 389% year-on-year, marking the second time the company’s quarterly profits exceeded $1 billion.

The popular Model 3 and Y electric vehicles have become the main factor allowing Tesla to achieve a big increase in net profits during the third quarter. Data show that Tesla delivered 232,102 Model 3s and Ys in the third quarter, up 87% year-on-year, accounting for 96% of the company’s total deliveries in the current period.

Tesla also said in its quarterly report that it expects automobile deliveries to achieve an average annual growth of 50% in the next few years, and the goal is still to produce the first batch of Model Ys in Berlin and Texas before the end of this year. In addition, Tesla announced that the Fremont factory in California has produced more cars in the past 12 months than in any previous year, but there is still room for further improvement.

According to the media report, the Fremont factory produces Tesla Model 3 and Y in the United States. With Tesla’s statement on LFP batteries in the third quarterly report, it means that the standard range version of Model 3 and Y produced by this factory will also be equipped with LFP batteries.

The industry believes that that whether it is the factory in Fremont, California or the factory in Austin, Texas, it should follow the principle of local matching, and it is unlikely to transport batteries by sea. BYD, which already has a power battery factory in the United States, undoubtedly has an advantage.

“The information I got is that BYD has obtained an order for Tesla 10GWh,” the above-mentioned source close to BYD said, according to the media report. However, this information has not yet been confirmed by either party.

Pandaily is a Beijing-based media company. Equipped with a deep understanding of China’s technology landscape and the unicorns that drive its innovation, our mission is to deliver premium content with contextual insights on Chinese technology, business, sports and culture to the worldwide community.