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Ford EV Battery Supplier CATL Will Raise Prices This Year

For some time now, automakers have been banking on the expectation that EV batteries – the most expensive component of an electric vehicle – would decline in price over time, making electric vehicles more affordable for the masses and enabling widespread adoption. However, the opposite has happened as numerous supply chain issues have wreaked havoc on the automotive industry as a whole, making raw materials and everything else significantly more expensive. Now, Ford EV battery supplier CATL has announced that it is also raising its prices, according to Reuters.

The Chinese-based Ford EV battery supplier is the largest manufacturer of those types of batteries in the world, and also supplies them to BMW, Volkswagen, and Tesla. However, as the prices of raw materials like lithium and nickel have exploded in recent months, CATL’s bottom line has suffered, as the company posted a 23.6 percent drop in profit during Q1 of 2022 – the first time in two years it experienced negative numbers in that regard.

As a result, CATL has been engaged in pricing negotiations with its clients, and has nearly completed that process. It will implement the resulting price changes throughout the second quarter, though the company also expects that as raw materials suppliers ramp up output, prices will eventually fall back to “reasonable” levels.

Ford began sourcing batteries from CATL for its Chinese market vehicles back in December, but also utilizes batteries from BYD in that country. However, The Blue Oval also gets EV batteries from a host of other companies including SK Innovation, LG Energy Solution, and Panasonic, and recently formed a battery production joint venture called BlueOvalSK.

CATL isn’t the first Ford supplier to announce forthcoming price increases, as Bosch is in the midst of renegotiating its part prices as well, as Ford Authority reported yesterday. Regardless, a jump in EV battery costs – which are predicted to soar by as much as 40 percent over the next two years – won’t help the automaker reach its goal of producing two million EVs annually by 2026.

We’ll have more on this soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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Comments

  1. Joe

    ICE, don’t leave home without it.

    Reply
  2. Daniel

    Think maybe it’s time to invest in US manufacturing? Given that China doesn’t have the best interests of the United States in mind might it not be a better idea to have batteries manufactured in North America? This is why the elites in Washington, D.C. have been worthless for the US. They have given, bartered, and outright sold natural resources to China’s CCP and allowed our manufacturing to go overseas. Thanks to Bill Clinton we have to compete with China, who 30 years ago couldn’t build a toothbrush.

    Reply
  3. John Coviello

    I will not F&**&*&*&ing buy Ford vehicle that has a Chinese battery PERIOD !!!!!

    Reply
  4. David Dickinson

    If they lost 23.6% in Q1, then we can make a guess that their costs have gone up at least 23.6%. The article says they expect battery costs to go up 40% in 2 years. It looks like they need to go up 33% in one year for them to have decent profitability. In the near term, the price of just an EV battery is going to exceed the price of an entire small ICE automobile. Those numbers don’t work well for the EV industry.

    Reply

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