Morgan Stanley said that as lithium carbonate prices soared, electric vehicle battery manufacturers would need to raise prices by nearly 25 per cent, which would lead to lower profit margins and could even undermine demand.
the price of lithium carbonate (a key raw material for electric vehicle batteries) in China has increased fivefold in the past year, analysts from Damascus, including Jack Lu, said in a report released on March 24. The cost transmission may prompt electric vehicle manufacturers to raise prices by 15% and may affect the demand for electric vehicles
In the past two weeks, Tesla has raised prices several times in China. Xpeng has also adjusted the price of cars on sale since March 21. The price increase before the subsidy ranges from 10100 yuan to 20000 yuan Byd Company Limited(002594) (BYD) and WM motors also raised prices.
"Historically, the battery price cost curve has been declining at a rate of 3% to 7% per year for many years, which seems inevitable." Analysts said and pointed out that "the world has changed, and the new model of input cost has also changed."
Lithium carbonate prices soared as demand from carmakers exceeded supply, highlighting that the energy transition could slow due to shortages of raw materials and refining energy.
China's lithium giant's revenue increased significantly
Chinese lithium mining giants Ganfeng lithium and Tianqi Lithium Corporation(002466) both reported a substantial increase in initial revenue in the first two months of this year due to rising lithium carbonate prices.
Ganfeng Lithium Co.Ltd(002460) 3 announced on March 14 that from January to February, the company achieved an operating revenue of about 3.6 billion yuan, an increase of about 260% year-on-year; The net profit attributable to the shareholders of the listed company was about 1.4 billion yuan, an increase of about 300% year-on-year; The net profit after deducting non recurring profits and losses was about 1.8 billion yuan, a year-on-year increase of about 1000%.
Tianqi Lithium Corporation(002466) announced on the same day that from January to February, the company's lithium concentrate output increased by about 39% year-on-year, the sales volume increased by about 56% year-on-year, and the operating revenue of lithium concentrate is expected to increase by about 366% year-on-year. From January to February, the company expects the operating revenue of lithium compounds and their derivatives to increase by about 492% year-on-year.
Morgan Stanley pointed out that most battery manufacturers in China, which dominate the lithium battery industry, buy lithium carbonate on the spot market rather than through long-term contracts. However, large companies like Contemporary Amperex Technology Co.Limited(300750) such as catl may get some discounts.
Tesla shares are expected to rise another 30%
despite the rise in the price of battery raw materials, Morgan Stanley still maintains Tesla's "overweight" rating, with a target price of $1300, about 30% higher than the current level
The bank said that there was "profound" long-term change space in the battery industry, and Tesla's scale, technology and vertical integration put it in the best position relative to other electric vehicle manufacturers in meeting the challenges.
Tesla's share price rose 1.48% on Thursday. With the selling tide of technology stocks, the stock has fallen more than 15% this year.
