Tesla Battery Price Slashed By Its Supplier For Everyone Else!

Charlie Munger of Berkshire Hathaway noted that their investment BYD is 'almost ludicrous' ahead of Tesla in China's EV sales, and that lackluster sales are starting to bite. CATL is offering its biggest clients half-price batteries, but Tesla is not one of them. The Tesla supplier that makes cells for its base range Model 3 and Model Y vehicles is decreasing battery prices to lock in consumers due to falling lithium prices. CATL declined Tesla's offer due to its low Chinese sales. Photo Credit: Financial Times The world's largest EV battery maker, CATL, is trying to lock its top clients, like NIO and Li Auto, into 3-year contracts to acquire 80% of their batteries from CATL for a significant price drop. Extreme? With lithium carbonate prices around US$60,000/ton, CATL is offering a long-term contract for less than US$30,000. That half-price reduction in battery raw materials would significantly reduce CATL's primary clients' vehicle battery prices. NIO recently complained that the 150 kWh battery for its long-range vehicles costs almost as much as its ET5 sedan, so it will rent the 620-mile battery for summer travels instead of selling it. Last year, CATL said that it would pass on battery material and component pricing increases to clients like NIO in the form of higher battery costs. It had record margins among its peers, but manufacturers that utilized CATL exclusively had to find a second or third supplier. CATL wants to lock them in for the long haul and launch a battery price war as Tesla did in the EV market with the present offer, which some have signed. Recent comments by Charlie Munger explain why CATL excluded Tesla from the lucrative opportunity to produce batteries up to twice cheaper in three years. Berkshire Hathaway's Vice Chairman claims that BYD, which he persuaded Berkshire to buy shares in years ago, is selling more than Tesla in China, the world's largest EV market. Photo Credit: Los Angeles Times "Tesla cut China prices twice last year. BYD raised pricing. Direct rivals. BYD leads Tesla in China by a ludicrous amount "Munger. CATL's battery price decrease offer is based on future sales forecasts, thus it expects NIO and other EV juggernauts it works with to outsell Tesla locally.