Other manufacturers will follow CATL example
China’s Contemporary Amperex Technology (CATL), which supplies lithium iron phosphate (LFP) batteries for Tesla’s electric vehicles, intends to raise prices for these products by 10%, according to a source citing industry representatives. The CATL solution is driven by rising costs for LFP battery materials .
CATL credited with intent to understand LFP battery prices
Note that Tesla has recently raised the price of Model 3 electric vehicles in China, in response to rising prices for raw materials and components. The source said the entire battery supply chain in China is now closely monitoring whether CATL will raise prices for its LFP batteries, as the cost of LFP materials has increased by 50% since the beginning of this year.
Most other LFP battery manufacturers are hoping CATL, a leading supplier, will take the lead in raising prices. This will allow them to follow CATL’s lead to offset sharp increases in material prices.
Most manufacturers do not risk raising prices on their own, as long-term orders can be lost this way. On the other hand, if prices are not raised on time, the survival of companies may be in jeopardy, as they have to cover the rise in material prices from their own pockets.
As a result, small suppliers of LFP batteries and newcomers to the market will disappear, as only large companies with their production volumes can negotiate the supply of materials at the lower prices necessary to maintain profitability of production.