Batteries are the most expensive component in an electric vehicle. And the most promising detail for improvement and innovation — specialists are actively working to make them more compact, more efficient and cheaper. However, instead of the long-awaited technological breakthrough and mass availability of electric cars, consumers, it seems, should prepare for the opposite — an increase in price tags. Several large battery manufacturers have announced a rise in energy prices.
The Chinese company BYD produces not only cars, and electric cars in particular, but also batteries. The concern mainly makes components for its own models, but supplies them to some other manufacturers as well. For example, BYD batteries are used in FAW cars and (since 2018) in Ford Mustang Mach-E. Recently «BID» announced that from November 1 it will raise prices for its batteries by 20% minimum.
As explained in the BYD documents, prices for important battery components have increased significantly: by 200% for lithium-cobalt oxide and by 150% for electrolyte. Another reason is the limitation of capacity and limits for the production of raw materials. Finally, due to the pandemic, supply chains are disrupted, which also increases the costs of the manufacturer.
Thus, from November 1, those companies that use BYD batteries will order them at new prices. This will certainly affect the final prices of cars for consumers. BYD is one of the largest suppliers of batteries and alternatives will not be easy.
Moreover, competitors are also talking about price increases. CATL is rumored to have plans to raise them by 10%.
Tesla has already raised prices for its Model 3, which is assembled in China.
Meanwhile, another battery maker, LG, is having a tough time. It is obliged to pay $ 1.9 billion for a revocable campaign for the Chevrolet Bolt EV electric vehicles of the American concern General Motors. The vehicles need to go to service to replace the batteries, as it has been found that they can cause a fire — several such cases have already occurred. This will not improve the market situation either.
The growing dependence of European auto companies on Asian suppliers will also contribute to the rise in prices for batteries (and therefore electric vehicles). Currently, there are not enough battery factories in Europe, so carmakers will either order components in China or build factories: both will lead to huge costs, some of which will be compensated by the buyer.
Toyota, which has been sharply negative about the move to electric vehicles, is now seeking to close its own need for batteries. To this end, the North American office of the Japanese brand intends to invest in the development and production of batteries in the United States and not depend on suppliers. Toyota’s key goal is to reduce the cost of batteries by 30%.