CATL, Farasis Energy confirm battery price rise due to hike in raw materials prices

Shanghai (Gasgoo)- Chinese main power battery suppliers, CATL and Farasis Energy, recently confirmed their adjustments on battery prices due to the hike in upstream raw materials prices.

Photo credit: CATL

CATL said it has dynamically adjusted prices of some battery products because of the rising costs on raw materials, without specifying which ones.

Notably, CATL's confirmation came after a local media outlet disclosed that the battery maker has raised battery prices twice since the second half of last year. Citing a person with direct knowledge, the report said each price increase made by CATL resulted in about 10,000 per car ($1,570) of growth in new energy vehicle (NEV) costs.

Farasis Energy recently said via a Q/A platform for shareholders that it has finished the negotiations with most main clients, leading to the increase in battery prices for the year of 2022.

However, Farasis Energy also noted the negotiation with Mercedes-Benz, its biggest client, is still underway.

Apart from CATL and Farasis Energy, other battery makers like BYD, Gotion High-Tech, and Great Power have all been rumored to lift battery prices since last October.

Following the rising costs of power batteries, a slew of NEV automakers triggered a spree of vehicle price rise, including Tesla, BYD, HOZON Auto, Chery New Energy, ORA, Geometry, and Leapmotor.

Li Xiang, CEO of Li Auto, said via its personal Weibo account that automakers who had signed contracts with their battery suppliers for battery price increase have all raised prices on NEVs. Those who have not announced price rise are still in negotiations. “The cost of batteries in the second quarter rose by a very ridiculous amount,” he added.