Runaway raw material costs are fueling a “ridiculous” increase in the price of batteries for electric vehicles, according to Li Auto Inc. Chief Executive Officer Li Xiang, who took to social media in China over the weekend to offer a rare insight into EV makers’ pain.
“The cost of batteries in the second quarter rose by a very ridiculous amount,” Li said on his official Weibo account late Saturday. Carmakers that haven’t raised prices yet are probably going to have to once their battery suppliers start charging more, he added.
While Li Auto, a Contemporary Amperex Technology Co. Ltd. customer, hasn’t made any price adjustments to its cars, the world’s biggest battery maker confirmed it has raised prices on some of its products, without specifying which ones.
“Due to the price surge of the upstream raw materials, we have made dynamic adjustments to the prices of some of our battery products accordingly,” a CATL spokesman said via text message Monday.
Li’s comments came after automakers in China from Tesla Inc. to BYD Co. increased the prices of their cars. Xpeng Inc. also hiked costs last week, saying in a note to customers that it will increase the price of its EVs by between 10,100 yuan ($1,590) and 20,000 yuan.
Car manufacturers in China, the world’s biggest EV market, are trying to lure more customers just as government subsidies for cleaner vehicles fall away. Combustion engine cars, still made by the likes of BYD and Geely Automobile Holdings Ltd., also facing higher running costs due to soaring oil prices.
CATL said in an earlier statement that the higher commodity costs were applying pressure on cell and automakers alike. It vowed to maintain “a reasonable level of profit.”
Smaller EV maker WM Motor Technology Co. also cited raw materials prices and supplier constraints for its increases of between 7,000 yuan to 26,000 yuan after subsidies, according to a Weibo post last week. Those hikes kick in from March 28.
WM Motor also get its batteries from CATL, among other suppliers, according to Bloomberg Intelligence.
(By Danny Lee)