BYD won a big order of Tesla 10GWh blade battery!

According to an industry source close to BYD, "the information I got is that BYD has received an order from Tesla 10GWh."

In response, a reporter contacted the relevant person in charge of BYD, and BYD replied: "No comment."

The background of the news is that on October 20, US time, while Tesla announced that he had achieved the best net profit, operating profit and gross profit in the third quarter of fiscal 2021, he also announced a big news-- all standard continuous flight electric models are switching to lithium iron phosphate batteries worldwide.

Tesla's financial report for the third quarter of fiscal 2021 showed that the company achieved total revenue of US $13.757 billion, an increase of 57% over the same period last year, a net profit of US $1.618 billion, an increase of 389% over the same period last year, and a gross profit margin of 30.5% for the automobile business.

Tesla also expects deliveries to grow by an average of 50 per cent a year in the next few years. The market predicts that the reason for giving Tesla such strong confidence is the lithium iron phosphate battery, which is safer, cheaper and increasingly popular with consumers around the world.

Tesla and Lithium Iron Phosphate

"Cobalt-free does not necessarily represent lithium iron phosphate" is Tesla's statement before supporting lithium iron phosphate battery.

Since using the lithium iron phosphate battery, Tesla appeared to get out of control: in July 2020, he began to use the lithium iron phosphate battery provided by the Ningde era; nearly a year later, in June 2020, Tesla signed an agreement with the Ningde era again. The agreement stipulates that Ningde era will supply Tesla with lithium-ion power battery products between January 2022 and December 2025.

On the other side of the seesaw, LG New Energy, which supplies ternary batteries for Tesla's Shanghai factory, ranked among the top three of China's power battery shipments by supplying Tesla with power batteries in 2020, but since the beginning of the second half of this year, the power battery installation of LG New Energy in the Chinese market has plummeted: the first three, barely squeezed into the top 10, and failed to make it into the top 15.

At present, the output of Tesla's Shanghai super factory has exceeded that of the Fremont plant in California. "China has been our main export center throughout the third quarter, and our production capacity in China has increased significantly," Tesla said. "

Why is the production capacity of Tesla's Shanghai factory increasing faster, and the current output is higher than that of the Fremont plant? The Shanghai super factory has lithium iron phosphate batteries, while the Fremont plant has only ternary batteries, which is one of the reasons.

Specifically, at the end of August this year, users who ordered the standard enhanced Model 3 in the United States received an email saying that if they wanted to get the car in advance, they could choose lithium iron phosphate batteries, and lithium iron phosphate batteries were also available in the inventory of models in the United States.

Obviously, these Tesla cars are made in Tesla Shanghai Super Factory and transported to the past.

Tesla and BYD

Note the two message values:

First, Tesla CEO Musk said at the second quarterly report conference in early August that Tesla will gradually switch to the scheme of using lithium iron phosphate battery in the future. In terms of battery composition, 2/3 of Tesla's batteries will use lithium iron phosphate in the future.

Second, in early August, it was rumored that BYD would supply Tesla with lithium iron phosphate blade batteries in the second quarter of 2022, and that the Tesla model equipped with "blade batteries" had entered the C-sample testing stage.

The reality is that the market believes that if Tesla's future lithium iron phosphate model is to account for 2/3, if it is supplied by Ningde era alone, that is 67%. For the sake of the security of his supply chain, Tesla will not let the battery supplier be dominant, so it is only natural to look for the second and third supply of lithium iron phosphate.

In this context, BYD is one of the largest lithium iron phosphate battery manufacturers in the world, and the blade battery is based on lithium iron phosphate, which innovates the battery production and processing process to improve battery mileage while greatly improving battery safety. Tesla will not ignore the blade battery.

BYD has also pointed out, "all the car brands you can think of are discussing cooperation with us." The implication, of course, includes Tesla.

Further supporting the fact that Tesla is about to use BYD's blade battery is that BYD has built a lithium iron phosphate battery factory in Lancaster (Lancaster), Pennsylvania, to provide batteries for BYD electric buses sold in the United States. Although the plant has a capacity of only about 1GWH, it is only about 500miles from the Tesla Fremont plant, and it can meet Tesla's early demand for lithium iron phosphate batteries through the upgrading of the production line.

"whether it is a plant in Fremont, California, or a plant in Austin, Texas, for cost considerations, it should follow the principle of local matching, and it is unlikely to transport cells or battery packs by sea. BYD, which has a power battery factory in the United States, undoubtedly has an advantage. "

It may be true that Tesla will use blade batteries next year.

Summary

The cooperation between Tesla and BYD is a win-win situation: for BYD, its battery supply will make a major breakthrough; for Tesla, its own competitiveness will also increase.

What Tesla's shareholders want is that they can bring sustainable profits. Compared with ternary batteries, there are more lithium iron phosphate batteries with safer and lower price, which is more conducive to the development of Tesla.