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• BYD secures lithium supplies
• The supplier is a financial participation of the Chinese
• Also forced Tesla to act
The Chinese BYD group is not only one of the largest manufacturers of electric vehicles. In addition, the company, backed by star investor Warren Buffett, has also established profitable battery production. The business segment has high demand for rare commodities, which include lithium. With a series of measures, BYD has now secured access to a larger quantity of the coveted metal.
Half a billion dollars in lithium supplies
According to it-times, BYD has secured further lithium deliveries with a volume of four billion yuan, the equivalent of around 593 million US dollars. According to the information, the EV company will purchase lithium products in the same volume from the local products Shenzhen Chengxin Lithium Group this year or place corresponding orders. BYD had previously invested in Shenzhen Chengxin Lithium and invested up to three billion yuan. The listed producer had issued new shares as part of BYD’s equity investment.
Stake in Shanshan increased
It is not the first time that BYD has gained access to the coveted raw material through a financial stake in a producer. According to it-times, the technology group only gained access to additional lithium capacities in April after the company had increased its stake in Shanshan Lithium Battery Material Technology.
Tesla has to react
It is also important for the largest electric car manufacturer Tesla to obtain important resources in this segment in view of the massive increase in lithium prices. Tesla boss Elon Musk recognized this around two years ago and secured rights to mine lithium in Nevada. In addition, the US electric car manufacturer signed a contract with an Australian lithium company.
In addition, Musk recently advised prospective founders to get involved in this segment. “The price of lithium has risen to insane levels,” Musk tweeted a few weeks ago.
Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale, unless costs improve.
There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refining is slow.
– Elon Musk (@elonmusk) April 8, 2022
Tesla will likely be forced to enter the industry on a larger scale if costs don’t improve, the billionaire said. The Tesla boss believes that this is also an opportunity for prospective business owners. “Get into the lithium industry, there are profit margins of up to ninety percent, similar to the software industry, it’s like printing money,” he said, according to “WirtschaftsWoche” as part of the most recent balance sheet presentation.
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