China-based Contemporary Amperex Technology (CATL), a LFP (lithium ferrous phosphate) battery maker reportedly in the supply chain of Tesla, has dismissed speculation about it planning to raise quotes to reflect increased materials costs.
Tesla has recently raised the unit price for Model 3 sold in China in response to cost increases for raw materials and components, and the entire battery supply chain in China is closely watching whether CATL will hike its LFP battery quotes as the cost of LFP materials has risen 50% so far this year, according to industry sources said. There have been reports from China claiming CATL is looking to raise prices by 10%, but the company has dismissed such speculation.
Most other LFP battery makers hope CATL, the leading vendor, can take the lead to raise prices to counter sharp cost increases for LFP material, so that they can follow suit, the sources continued.
Most battery makers are now caught in a dilemma: They may risk losing long-term orders if they raise LFP battery prices, but their survival could be threatened if they fail to do so, the sources said, adding that they have been absorbing the cost increases on their own.
The latest round of material cost increases may serve to price smaller LFP battery vendors or newcomers out of the market, with major ones able to secure more supply of LFP materials at lower prices and conduct more-cost-effective production of LFP batteries, the sources said.
Article translated by Willis Ke
