Mexican Media Brands
Tesla Inks 5-Year Lithium Deal with Chinese Supplier
Materials strategy mimics multi-sourcing battery plans
Share
To help keep pace with its surging sales, Tesla has signed a five-year contract to buy battery-grade lithium hydroxide from China's Sichuan Yahua Industrial Group.
The deal is valued at $630 million-$880 million through 2025. This equates to as much as 19,000 ton of lithium hydroxide per year.
Chinese Connection
Chengdu-based Yahua opened a new plant last May that can produce 20,000 tons of the material per year, more than doubling the company’s previous capacity.
Tesla Model Y (Image: Tesla)
Tesla, which ramped up production at its vehicle assembly plant in Shanghai in January, also sources lithium from China's Ganfeng Lithium, one of the world's biggest producers of the pricey material.
The carmaker also has an agreement with Chinese battery giant CATL (in addition to Panasonic and LG Chem).
Bottom Line
Tesla aims to sell as many as 1 million vehicles in 2021—which would double its projected record volume this year—and is planning new factories in Germany and Texas, with an eventual (extremely ambitious) goal of selling as many as 20 million EVs per year.
Needless to say, it’s going to need a lot of lithium to power all the new cars. Deals with more suppliers are likely to follow this one.
RELATED CONTENT
-
Choosing the Right Fasteners for Automotive
PennEngineering makes hundreds of different fasteners for the automotive industry with standard and custom products as well as automated assembly solutions. Discover how they’re used and how to select the right one. (Sponsored Content)
-
On Fuel Cells, Battery Enclosures, and Lucid Air
A skateboard for fuel cells, building a better battery enclosure, what ADAS does, a big engine for boats, the curious case of lean production, what drivers think, and why Lucid is remarkable
-
On Automotive: An All Electric Edition
A look at electric vehicle-related developments, from new products to recycling old batteries.
