Electric vehicles’ batteries are getting really expensive to make. So now what?
Investors are shocked that the world’s biggest electric vehicle battery maker’s earnings tanked last quarter. They wouldn’t have been if they had looked past the hype. It’s time to wonder what’s next, though — will battery makers just keep getting squeezed?
At China’s Contemporary Amperex Technology Co. Ltd., or CATL, a supplier to Tesla Inc., revenue grew 154% but earnings fell 24% to 1.5 billion yuan, showing how steep raw material costs were.
Even with these dismal numbers, its market share stayed flat at 50%. Soaring lithium prices pushed up raw material costs for cathodes at the eight largest European and American battery electric vehicle producers by an average of $1,700 per car in March (from a year ago) based on spot prices, according to Barclays PLC analysts. Prices for the metal have shot up so high that miners are posting multi-fold profit increases. They’ve passed costs on to customers: the battery makers.
