Sources within China’s battery industry suggest BYD might make its automotive lithium batteries available to other carmakers, while another leading lithium-ion battery maker plans to establish two joint ventures with state-owned SAIC Motor.
The informed sources suggest BYD will split its vehicle and battery manufacturing businesses, opening the door for BYD to supply its lithium iron phosphate (LFP) batteries and ternary lithium batteries to the wider market.
This move may be spurred by the fast growth of rival battery manufacturer Contemporary Amperex Technology Ltd (CATL). Last week, the Chinese government announced that CATL to set up two JVs with SAIC Motor to design, manufacture, and commercialise lithium-ion batteries and battery systems. The deals worth ¥20 billion ($2.9 billion).
Hui Wu, research director at CCID Consulting, noted the main reason for BYD’s strategic changes might be the decline in sales of its new energy vehicles in the first quarter of 2017, which also hit the sales of BYD’s automotive batteries.
BYD was the highest selling manufacturer of new energy vehicles worldwide in 2015-2016, according to company data. However, the reduction of the Chinese government’s subsidy on electric vehicles has robbed BYD of its top spot in the domestic car battery supply league.
Wu thinks, in this increasingly competitive market, it makes sense for BYD to split its car and battery operations, and for it to supply batteries to other carmakers.
In the first quarter 2017, CATL dominated the domestic car batteries market with 328MWh supply. CATL’s clients include Volkswagen, BMW, National Electric Vehicle Sweden, which bought the bankrupt Saab carmaker in 2012, and Hyundai.
Fujian province-based CATL will provide batteries for Hyundai’s plug-in Sonata sedans that are expected to hit the Chinese market in the first half of 2018.
CATL is currently building a lithium-ion battery manufacturing factory in East China’s Jiangsu province at a cost of about ¥100 billion ($14.5 billion), and there are reports it has “an eye on opening” a factory in Europe.