CATL offers big battery discounts amid looming lithium surplus

This is older news from last week which I planted in another thread. It’s noteworthy - when you think about all the problems going on at Tesla Shanghai - that this deal is not extended to Tesla, one of its established customers in China.

Musk doesn’t have a leg to stand on by going to CATL and asking to be included in the newer 20% discounts, not when he has lowered prices of Teslas, then raised them, then lowered them, repeat, ad infinitum while owners of expensive cars just ordered are not offered the newer discounts.

CATL’s new lithium pricing structure gives Chinese original equipment manufacturers (OEM) an effective discount of more than 20%. It is making the move to win more orders amid a slowdown in the electric-vehicle market and the ongoing efforts of cell manufacturers to secure raw materials.

CATL is reportedly offering sharp discounts on battery purchases to its strategic clients, including major Chinese automotive manufacturers such as NIO, Li Auto, Huawei, and ZEEKR. The Chinese battery manufacturer, which produced 37% of the world’s electric-vehicle batteries in 2022, will not offer such discounts to its largest customer, Tesla, which operates a gigafactory in Shanghai.

Based on the proposal, which has yet to be confirmed, OEMs will be able to produce 50% of batteries in their contracts with CATL with battery-grade lithium carbonate, at costs of CNY 200,000/mt ($28.82/kg) per metric ton, provided they agree to source 80% of the battery demand from CATL in the first three years. The remaining 50% of the batteries will be priced at spot market prices.

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