Tesla Inc has signed new long-term deals with two existing Chinese battery material suppliers, to deal with possible impacts of a shortage of battery metal resources. this is the latest move by the automaker to secure supplies as competition intensifies.
Tesla factory of EVs in China
According to public information, ternary precursors are key materials for lithium-ion batteries using nickel salts, cobalt salts and manganese salts as raw materials for energy storage in lithium-ion batteries.
Both HY Cobalt and ZW have signed agreements to supply Tesla with ternary precursor products by the end of 2025, according to their respective announcements on the stock exchange.
The announcement comes as major automakers are snapping up battery metal in response to a looming shortage.
GM unveiled purchase agreements from lithium to cathode materials, while Ford Motor recently disclosed a list of raw material suppliers including Argentine lithium and Indonesian nickel.
HY Cobalt will supply ternary precursor products to Tesla from July 1, 2022 to December 31, 2025. The company said product prices will be determined based on nickel, cobalt and manganese market prices and processing fees.
ZW will provide the electric vehicle maker with power lithium battery material products from 2023 to 2025.
Lithium prices have risen more than 400 percent in China over the past year, sparking a flurry of deals between Chinese miners and battery makers from Argentina to Zimbabwe. And as demand for electric vehicles drives up lithium prices, battery makers are scrambling to secure supplies.
HY Cobalt rose more than 9% on August 1, and ZW shares rose 7.2%.
