Chinese auto and battery maker BYD Co. has been actively purchasing lithium in an effort to secure a key ingredient of batteries that power electric cars and whose price has been soaring.
BYD has signed a contract with Jiangsu Jiujiujiu Technology Co. to purchase at least 7,870 tons of LiPF6, a lithium fluoride commonly used as electrolytes in lithium-ion batteries, by 2023, the lithium supplier's parent said Tuesday in a stock exchange filing.
That followed BYD's recent agreements with two other lithium producers to purchase at least 13,560 tons of LiPF6 in total, also by 2023, according to the statements from the two suppliers.
BYD's move comes as the Shenzhen-based company expands its EV battery business as demand grows in China for electric cars.
In April-June, electric cars accounted for 12% of China's total passenger-car sales, and January-June EV sales exceeded one million vehicles, according to the China Passenger Car Association, close to 2020's full-year total of 1.1 million.
Last week, BYD agreed with FAW Group Corp., a state-owned auto maker, and the government of Changchun in China's northeastern automotive hub to collaborate on an EV battery project, a local government statement showed.
BYD didn't immediately respond to a request for comment.
The price of LiPF6 has been rising in recent weeks. It currently costs more than 400,000 yuan, or around $61,700, per ton, compared with 300,000 yuan per ton in early June and almost six times the price a year earlier, according to commodity price tracker OilChem China.
Besides being a car maker, BYD is also China's second-biggest EV battery supplier after Contemporary Amperex Technology Co. and runs seven EV battery factories in China, mostly in the south.
Unlike many other EV makers, BYD has said it uses self-built batteries in most of its electric cars. That helps the company hedge against supply chain uncertainties and cut costs, analysts say.
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(END) Dow Jones Newswires