(Image credit: Tesla)
The topic of BYD (SHE: 002594, HKG: 1211, OTCMKTS: BYDDY) supplying batteries to Tesla (NASDAQ: TSLA) has been of discussion in recent days, and now more information is starting to emerge.
Within BYD, supplying batteries to Tesla is a certainty, local Chinese media outlet Auto Time said Monday, citing a person close to FinDreams Battery, the battery manufacturing arm of the new energy vehicle (NEV) giant.
The Tesla model that will use BYD batteries will be the Model Y, the report said, citing another person familiar with the matter, adding that the two will not move forward fast and that BYD batteries to be used on a large scale in Tesla models may not happen until next year.
Tesla currently has a factory in Shanghai that produces the Model 3 and Model Y vehicles, which are offered to local consumers as well as exported to other regions.
The current suppliers of power batteries in China-made Tesla vehicles are Contemporary Amperex Technology Co Ltd (CATL, SHE: 300750) and LG Energy Solution, which are providing 70 percent and 30 percent of the supply in 2021, respectively.
Since last August, there have been several rumors that BYD would supply batteries to Tesla, but none of those rumors have previously been confirmed.
Last week, BYD executive vice president and director of the automotive engineering research institute Lian Yubo said in an interview with state-owned media outlet CGTN host Kui Yingchun that BYD will soon supply batteries to Tesla.
Notably, however, the video of the interview posted by Kui on Weibo was later deleted, with local media citing people related to Tesla saying they had not heard of it.
As one of the world's top three power battery makers, BYD is a good choice for Tesla to partner with, Auto Time said, citing an unnamed industry source.
For BYD, supplying Tesla would mean a major breakthrough for its power battery business. Tesla's approval will help attract more car companies to purchase BYD's batteries, the Auto Time report said.
BYD's batteries were previously used mainly in its passenger car business, and in March 2020, the company announced the formation of FinDreams Battery to run its battery business independently and ramp up its external supply efforts.
CATL maintained its lead as the world's largest electric vehicle battery maker with a 35 percent share in the first quarter of the year, according to a report released May 2 by Seoul-based SNE Research.
LG Energy Solution ranked second, with a 15.9 percent market share in the first quarter. BYD ranked third, with an 11.1 percent market share in the first quarter.