BYD reveals a battery deal with 'friend' Elon Musk as it stays mum on whether Tesla ordered safer blade batteries or LFP packs
The wise investment of the Oracle of Omaha Warren Buffett in the largest Chinese carmaker BYD in 2008 continues paying off as its VP just tipped that they will soon be entering Tesla's battery supply chain. It's not clear if Lian Yubo meant BYD's innovative blade battery that is safer and offers better energy density in the same footprint than the ones Tesla now buys, but any new supplier would be a valuable addition to Tesla's EV battery roster nonetheless.
In a wide-ranging interview for CGTN Mr. Yubo was asked by anchor Kui Yingchun on his thoughts about Tesla as a direct competitor in the EV realm. BYD recently unveiled the budget Seal model that will be clashing with the Model 3, while its flagship electric sedan Han is sizing up Tesla's performance cars. Both electric vehicles are powered by blade batteries, but Mr. Yubo said he views Elon Musk as a "good friend" and added that BYD will become the next Tesla battery supplier as if to prove his point.
Host Kui Yingchun: How would you rate your made-in-China (cars) versus Tesla? Many of your models are in direct competition with Tesla, and this business competition is fierce. I know Elon Musk has previously said that your cars are not good looking. But it doesn't matter, you guys are now number one in the market.
BYD VP Lian Yubo: Tesla is a very successful company no matter what, BYD respects Tesla and we admire Tesla. We are good friends with Elon Musk, and we will soon supply him with batteries. We are friends. It (Tesla) has a high starting point and adopts a high-profile strategy, including in the US capital market. It first launched the Model S and Model X, shaping itself into a high-end brand, giving young people the feeling that it is the representative of fashion, innovation and technology. Some of our domestic new car makers are actually also learning from it, and it is an example for us to learn from.
According to BYD, "while undergoing nail penetration tests, the Blade Battery emitted neither smoke nor fire after being penetrated, and its surface temperature only reached 30 to 60°C." In contrast, today's high-density performance batteries "exceeded 500°C and violently burned" when subjected to the same nail test. The LFP batteries that Tesla now uses for its standard range EVs did better to the extent that they didn't catch on fire, but "surface temperature reached dangerous temperatures of 200 to 400°C."
In addition, BYD's blade battery was "subjected to other extreme test conditions, such as being crushed, bent, being heated in a furnace to 300°C and overcharged by 260%." "None of these resulted in a fire or explosion," says BYD and adds that while everyone is chasing ever-higher energy densities, they are the only carmaker and battery manufacturer that focuses on EV safety.
Shares of BYD were up today on the news while those of other Tesla battery suppliers like LG or Panasonic went down. BYD also makes LFP battery packs and last fall there were rumors that Tesla has ordered 10 GWh worth of those from them, yet earlier this year industry sources claimed that BYD will supply 204,000 of the FinDreams blade battery units annually to Tesla as well.
One battery type order doesn't preclude the other, of course, and Tesla might be procuring both LFP units for its budget electric vehicles, as well as blade batteries for its performance ones from BYD.