As raw material prices soar and Chinese government cuts on NEV subsidies, BYD will raise EV model prices from 1,000 to 7,000 yuan from February 1, 2022. For those who have paid the deposit, prices will not be affected.
It is not the first time Chinese EV makers increased price for consumers. In last October, BYD, as a top battery supplier in the world, intended to raise the lithium battery prices by at least 20% on November 1, 2021. BYD explained that the limits of raw materials for lithium batteries were the major reason behind this price hike.
The prices of lithium carbonate have skyrocketed from 5,0000 yuan per ton to 266,000 yuan per ton, more than five times higher than last January. Other commodities used in cathodes, the most expensive part of a battery, have also been rising: The price of cobalt has doubled since last January to $70,208 a ton, while nickel jumped 15% to $20,045.
Prices for the battery and EVs is inevitably about to rise as supplies of lithium and other raw materials fail to keep up with soaring demand. According to CAAM, the sales of NEVs approached 3 million units, increasing 156.7% year on year. The sales figure is projected to reach over 5 million in 2022.
Against this background, China’s government decided to cut its subsidies for EVs by 30% in 2022. Subsidies on EV purchases have facilitated China to become the world’s largest market for EVs. The amount of subsidies for EVs largely depends on whether the target of having NEVs account for 20% of auto sales by 2025 can be achieved. Judging from the robust growth of EVs sales last year, the price hikes from EV makers, such as BYD and Tesla, will not deter potential customers in 2022.