Tesla pens long-term deals with two Chinese battery material suppliers

By Tejaswita Tiwari  | Date: 2022-08-01

Tesla pens long-term deals with two Chinese battery material suppliers

Electric vehicle giant Tesla Inc. has reportedly inked new long-term deals with CNGR Advanced Material Co. and Zhejiang Huayou Cobalt Co, two of its current battery materials suppliers in China.

As per credible sources, the Chinese companies inked pricing agreements with Tesla for supplies until mid-2025. The agreements are for ternary precursor materials that are crucial to store energy in lithium-ion batteries.

This development comes as key automakers are eagerly seeking battery metals anticipating a shortage.

Currently, Huayou has started delivering the materials to Tesla from July 1st, 2022, and this will last until the end of 2025. According to the miner, the product prices will depend on market prices for manganese, cobalt, and nickel, as well as refining fees. Meanwhile, CNGR will deliver the materials to Tesla between 2023 and 2025.

After the announcement, the shares of CNGR and Huayou Cobalt jumped over 9% each on Monday.

Last week, General Motors Co. launched deals to purchase inputs ranging from cathode materials to lithium, shortly after Ford Motor Co. unveiled a list of suppliers having raw materials like Indonesian nickel and Argentinean lithium.

The shift to cleaner energy is increasing the demand for battery materials, while COVID-19-related logistical challenges and lack of investment have hampered the supply chain. This has increased the prices of raw materials, thereby affecting the profitability of some automakers.

As per credible sources, CNGR and Huayou were a part of Tesla’s list of direct suppliers which the company presented in its 2021 yearly impact report. CNGR noted that it has supplied Tesla from 2020 to this year.

In other news, General Motors has inked long-term battery deals with Livent and LG Chem. GM’s deal with Livent will last for six years, starting in 2025 and its agreement with LG Chem will run through 2030.

The automaker asserted that both deals will work towards localizing the production of battery materials.

Source credits: https://www.bloomberg.com/news/articles/2022-08-01/tesla-inks-battery-materials-deals-with-two-chinese-suppliers

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Tejaswita Tiwari     thisisourtownrichmond.co.uk

Tejaswita Tiwari

Being born in a family of readers, Tejaswita has always had a natural flair for writing, using that enthusiasm to become a full-fledged writer after earning her MBA in Marketing. Her insatiable curiosity to learn about various verticals has made her a popular research...

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