Recently, Credit Suisse published a research report that BYD's sales rose 125% to 95400 vehicles in January from a year earlier, higher than the industry's forecast of about 8.5-95000 vehicles. BYD recently announced an across-the-board price increase of 1000 to 7000 yuan per vehicle, which is expected to offset the negative impact of reduced subsidies and the rising cost of battery raw materials. Management expects battery production of 90GWh to 100GWH this year and believes that BYD batteries are likely to supply the Tesla European plant.
There have been rumors of BYD supplying goods to Tesla for a long time. In August 2021, it was reported that BYD would supply Tesla with "blade batteries" in the second quarter of 2022, and the Tesla model equipped with "blade batteries" has entered the C-sample testing phase; this is in line with the Credit Suisse report. In October of the same year, it was reported that BYD had won an order from Tesla 10GWh.
Although BYD doesn't admit it, the market tends to think that a lot of things don't come out of nowhere.
Generally speaking, as a sales terminal, car companies will not raise prices easily unless they have no choice, just as BYD said that the rising price of battery materials does bring a lot of pressure. Well, as a car company, Tesla will also have a lot of cost pressure, so Tesla will further increase the purchase of lithium iron phosphate batteries, which are cheaper than ternary batteries.
Tesla CEO Musk previously said that Tesla will gradually switch to lithium iron phosphate battery scheme in the future. In the future, 2/3 of Tesla's batteries will use lithium iron phosphate, and 1/3 may use ternary batteries.
At present, Tesla's Model 3 standard battery upgrade version and Model Y standard version launched in July 2021 use lithium iron phosphate batteries from Ningde era. After signing an agreement in February 2020 for the latter to become a supplier to Tesla, the two sides signed a supply agreement again in June 2021, and Ningde era will supply Tesla with power batteries until 2025.
Industry analysts said: "companies like Tesla and Volkswagen do not allow a single battery supplier to account for more than 50%. Tesla has determined that lithium iron phosphate will account for 2x3 in the future. If Ningde supplies it alone, it will be 67%. Then it is reasonable to find the second and third supply of lithium iron phosphate. As a product with Chinese characteristics, there are only several domestic suppliers. Including the Yiwei lithium energy that burst out some time ago, this time BYD is very likely to enter. "
According to common sense, with Musk's overbearing personality, it is impossible for him to be controlled by others and "put eggs in the same basket". Moreover, the blade battery is currently the most well-known iron lithium battery in the world, and it is hard for Musk to be indifferent.
Through structural innovation, blade batteries can skip modules in groups, greatly improve volume utilization, and finally achieve the design goal of loading more cells in the same space. Compared with the traditional battery pack, the volume utilization of the blade battery has been increased by more than 50%, and its range has been greatly increased. After innovation, the volume energy density of the blade battery package can be close to that of the ternary lithium battery.
As a blade battery of lithium iron phosphate system, its cost advantage is also very obvious. Take BYD Han as an example, under the same mileage, the blade battery can reduce the cost of the battery pack of the whole vehicle by 30%, and the gross profit of the bike can be increased by 17000 yuan.
In fact, Tesla has already tasted the cost benefits of iron-lithium batteries. According to incomplete statistics in the industry, Tesla Model 3 has experienced more than a dozen rounds of price cuts since it entered the Chinese market, from more than 300,000 yuan at the beginning to less than 250000 yuan today. Industry analysis pointed out: "the main reason for Tesla's price adjustment is due to the replacement of domestic (its assembled batteries) into lithium iron phosphate batteries. Thanks to this, Tesla's cost has dropped significantly."
Today, BYD is speeding up to increase the production capacity of blade batteries. How strong is BYD's production expansion? We can see a thing or two from its purchase of battery materials.
According to news in November 2021, BYD will purchase lithium hexafluorophosphate products with a total quantity of not less than 56050 tons from polyfluoroduo by 2025. According to industry estimates, the production of 1GWh lithium iron phosphate battery requires about 125t lithium hexafluorophosphate, so the battery capacity of the 56050 tons of lithium hexafluorophosphate purchased by BYD is estimated to be about 448GWh.
Prior to this, BYD purchased a total of 25630 tons of lithium hexafluorophosphate from three companies, namely, Polyfluorodo, Yan'an Bikang and Tianji Co., in July 2021, with a corresponding battery capacity estimated to be about 205GWh. Overall, BYD has purchased 81680 tons of lithium hexafluorophosphate in the second half of 2021 alone, with a corresponding battery capacity of about 653 GWH, a scale comparable to that currently planned in Ningde.
The installed capacity of BYD's power batteries will also grow rapidly in 2021. On February 7th, South Korean market research institute SNEResearch released the ranking of global power battery installed capacity in 2021, the top 10 are: Ningde Times, LG New Energy, Panasonic, BYD, SK On, Samsung SDI, China New Airlines (AVIC Lithium), Guoxuan Hi-Tech, Vision Power, Honeycomb Energy. BYD achieved 26.3GWH installed capacity, an increase of 168% over the same period last year, ranking fourth on the list.
It is not difficult to guess that if BYD really supplies Tesla blade batteries, then with Tesla's "carrying" capacity, BYD's battery installed capacity will also explode by a large margin.
