BYD, China’s electric vehicle powerhouse, is shaking hands with an unlikely ally. The company’s Qinghai division just inked a deal with Hubei Xingshun New Materials, a subsidiary of Xingfa Group—technically, a competitor. Funny how business works sometimes.
The agreement is massive: 80,000 tonnes of Lithium Iron Phosphate (LFP) materials annually, spanning two years with a possible one-year extension. BYD will pay Xingfa to process these vital battery components. No small potatoes here.
LFP technology remains BYD’s bread and butter, despite alternatives offering higher energy density. Why? Safety first, folks. These batteries are less likely to burst into flames—kind of important when you’re sitting on top of them. They also last longer, with over 3,500 charge cycles compared to just 2,000 for ternary lithium batteries. This focus on safety aligns with the environmental benefits seen in other sustainable energy technologies like geothermal power.
The Chinese market can’t get enough LFP batteries. Installations jumped 42.5% year-on-year by September 2025, capturing over 80% market share. BYD isn’t the only player in town, though. CATL and others are scrambling for materials too.
This agreement mirrors BYD’s other strategic partnerships, like with Fengyuan Chemical. That company alone has 230,000 tons of annual production capacity with another 80,000 tons coming soon. These suppliers are essential links in BYD’s ever-expanding supply chain. The deal supports new energy materials growth and strengthens the companies’ positions in the competitive market. Investor reaction has been positive, with Fengyuan’s shares increasing by 3.7% to CNY11.76 following their deal announcement.
For Xingfa, it’s a sweet deal. Their subsidiary gets guaranteed business for two years minimum, boosting operational performance and keeping shareholders happy. Similar contracts in the industry have been worth billions of yuan.
The arrangement makes perfect sense for both sides. BYD secures a stable supply of crucial materials while Xingfa maximizes its production capacity. In China’s hypercompetitive EV market, even rivals occasionally need each other.
Sometimes the smartest business move is partnering with your competition. BYD clearly got the memo.
References
- https://www.yicaiglobal.com/news/chinas-fengyuan-soars-after-saying-itll-become-byds-long-term-battery-materials-supplier
- https://www.mysteel.net/news/5106199-flash-xingfa-group-and-byd-sign-an-80-000-tonne-lfp-entrusted-processing-agreement-
- https://carnewschina.com/2025/11/07/byd-doubles-down-on-lfp-batteries-safety-first-for-chinas-evs/
- https://news.metal.com/newscontent/103337657/multi-billion-dollar-orders-sealed-within-5-months-giants-like-catl-byd-and-cornex-secure-orders-for-lfp
- https://www.youtube.com/watch?v=jckXjRT-8IU
- https://www.mysteel.net/news/5098678-flash-lopal-technology-signs-a-lfp-cathode-material-procurement-agreement-with-catl
- https://www.eliane.com/blog/zanini-de-zanine-cria-sua-primeira-linha-de-revestimentos-para-eliane?s-news-7067006-2025-11-09-byd-reverses-its-commitment-to-using-lithium-iron-phosphate-lfp-batteries-in-electric-vehicles
- https://news.futunn.com/en/post/65824220/hubei-xingfa-chemicals-subsidiary-signs-two-year-processing-deal-with
- https://source.benchmarkminerals.com/article/north-america-sees-lfp-production-capacity-pipeline-grow-driven-by-the-bess-market
