BEIJING — Chinese language electrical automobile firm BYD is feeling the hit of rising battery materials prices.

Backed by U.S. billionaire Warren Buffett, the automaker introduced late Monday that web income attributable to shareholders within the first quarter can be between 200 million yuan ($30.4 million) and 300 million yuan.

“Affected by the value fluctuation of upstream uncooked supplies, the revenue of car enterprise is but to be improved,” BYD mentioned in a launch, noting seasonal components additionally “have a sure affect” on new vitality passenger car gross sales.

In a rising marketplace for electrical vehicles, demand for the batteries to run them is rising. Consequently, Goldman Sachs analysts mentioned in a March 18 word that the costs of the primary supplies will surge, driving battery costs about 18% increased.

“(BYD) mgmt. additionally talked about they’re dealing with strain on uncooked materials value surge, e.g. lithium carbonate, electrolyte & copper,” Citi analysts mentioned in a word, citing a name with BYD’s Chairman Wang Chuanfu on Tuesday.

The lower-than-expected first quarter steering solely accounts for 3% to five% of what analysts expect for the total yr, Credit score Suisse analysts mentioned in a word Tuesday. They lowered their value goal on BYD’s Hong Kong-listed shares to 280 Hong Kong {dollars}, down from 310 Hong Kong {dollars} beforehand.

However that new goal nonetheless implies a achieve of greater than 60% for BYD from its shut Tuesday of 170.40 Hong Kong {dollars}.

The Credit score Suisse analysts attributed the decline in revenue steering to seasonal weak spot in automobile gross sales, decrease authorities subsidies and rising costs for battery uncooked supplies.

BYD reported web income attributable to shareholders of 4.23 billion yuan for all of 2020. The income share of cars and associated merchandise grew to 53% final yr, up from 49% a yr in the past, whereas that of batteries remained the identical at about 8%. The share of income from outdoors Larger China climbed to 39% from 16% a yr in the past.

Whereas new electrical car fashions in a rising market helped enhance these income, Nomura analysts identified the outcomes come on the low finish of the estimated vary as “increased uncooked materials prices have affected near-term revenue progress.” Nomura maintained its value goal on BYD of 300 Hong Kong {dollars}.

— CNBC’s Michael Bloom contributed to this report.