A senior executive from BYD said during an interview with Chinese state media that the company will soon supply batteries to Tesla. The VY Vice President Lian Yubo said, “We’re now good friends also with Elon Musk because we’re preparing to supply batteries to [Tesla] very soon.” The interview was taken by Chinese state media anchor Kate Kui.
BY’s revenue pool in 2021 of 7.29% was from its rechargeable batteries and photovoltaics. More than 50% share was from automobiles and other related productions in the company’s latest report. With the announcement to supply batteries to Tesla, BYD shares jumped by 2.79% on Wednesday. The Hong Kong-listed shares show a mirroring broader positive sentiment as the Hand Seng Tech index also advanced by 4.76%. Meanwhile, its competitors Xpeng surged by 6.13% and Nio up by 5.06%.
CATL has known to be a Tesla battery supplier, with the BYD announcement, its shares plunge more than 7% on Wednesday. CATL had around 25% market share globally in the battery market in the year 2020. In the coming years, more battery makers are coming forward. As Rimac recently raised funds to push its battery-making business and companies like Redwood materials founded by former Tesla CTO are recycling EV batteries.
BYD battery technology
BYD has been making its lithium iron phosphate (LFP) “Blade Batteries” since 2020, for use in its own cars and for sale to other automakers, such as Toyota. The company stated that the blade-shaped battery is thinner and longer than conventional lithium-ion cells and thus can maximize the use of available space within the battery pack. It’s also less likely to catch fire even when it’s severely damaged, according to BYD. Currently, Tesla uses LFP batteries supplied by Chinese firm CATL in nearly half of its cars. Tesla also uses nickel and cobalt batteries, supplied by LG Energy Solution and Panasonic.
Tesla’s China sales were strong at the start of this year, ranking the carmaker first among pure-electric brands. It delivered 65,814 vehicles from its Shanghai factory in March, with the majority of those sold in the Chinese market. That number was up 85% from a year ago.
BYD, which is one of the biggest sellers of new energy vehicles in China, wasn’t hit by the country’s sweeping lockdowns. In April, BYD continued to dominate the market, selling a record 106,000 cars. Analysts have attributed BYD’s resilience in sales to its “vertical integrated supply chain.” The business model has made BYD less vulnerable to supply chain disruptions during China’s Covid lockdowns, while rivals had to cut back production because of chip and battery shortages.
