Tesla has signed a contract with the Chinese Sichuan Yahua Industrial Group to supply battery-grade lithium hydroxide for the next five years. According to a report from the Shenzhen Stock Exchange, the contract is worth between 513 and 716 million euros.
Measured against this price range, the total procurement volume is expected to be between 63,000 and 88,000 tons, or 12,600 to 17,600 tons per year, according to analysts quoted by Reuters news agency.
Yahua commissioned a new lithium hydroxide plant in Yaan (Sichuan province) in May 2020. This doubled the company’s capacity to around 40,000 tons per year, according to Reuters. Tesla already purchases lithium in China from the company Ganfeng. Analysts cited by Reuters said the additional Yahua deal underscored Tesla’s “huge demand” for battery-grade lithium hydroxide, “especially given the ramp-up of Model Y production in Shanghai.” Ganfeng, however, would likely remain Tesla’s largest lithium supplier.
In November, it was announced that Tesla had also signed a multi-year supply agreement with Philadelphia-based lithium producer Livent. Although, exact volumes of the agreement were not mentioned.
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