BYD Co., the automaker backed by Warren Buffett, is readying to sell its own batteries to Tesla Inc., an executive at the Chinese company has told state media.
“We are good friends with Elon Musk and we are preparing to supply batteries to Tesla,” BYD’s executive vice president Lian Yu-bo said in a short video clip with state television broadcaster CGTN, released Wednesday.
While there’s long been speculation about the likelihood of BYD striking a battery supply deal with Tesla, neither party has ever confirmed talks. Representatives for BYD didn’t immediately respond to messages seeking comment. Tesla declined to comment.
Tesla, which also makes its own batteries, counts Contemporary Amperex Technology, LG Energy Solution and Panasonic among its other suppliers.
BYD’s Hong Kong-listed shares, up almost 13 percent this year, jumped as much as 4.1percent. CATL, the world’s largest battery maker, slumped as much as 7.2 percent.
Cell orders from Tesla would be a coup for BYD, one of China’s biggest automakers. The company’s May sales were stronger than expected, particularly against the backdrop of China’s COVID-19-related disruptions, with analysts putting the result down to BYD’s “higher level of vertical integration and better supply chain management.”
BYD, aiming to become more directly involved in lithium mining, the raw material that’s crucial for EV batteries, pledged earlier this year to stop producing cars entirely powered by fossil fuels.
CATL counts Tesla as its largest customer, generating around 13 billion yuan $1.9 billion or 15 percent of its power battery unit’s revenue. In recent months, the Ningde, Fujian-based company has struggled with soaring raw material prices and has used its dominance in the market to help pass on those rising costs to customers including Tesla, Nio Inc. and Xpeng Inc.