Tesla signs a new agreement to secure lithium supply
Tesla has signed a new updated agreement to secure lithium supply from Piedmont Lithium as automakers rush to secure battery material.
In order to help accelerate the transition to electric transportation, Tesla has become increasingly involved in the raw material supply chain for battery cells.
Despite only now starting the production of its own cells last year, the automaker has been securing the supply of lithium, nickel, cobalt, and other minerals for its battery cell suppliers for years.
More recently, Tesla started to not only deal with established mining companies, but it also started to sign contracts for offtake agreements with junior mining companies looking to build new mining projects that would increase the supply of some critical resources for batteries.
This strategy helps those companies raise money to build their mining projects.
Piedmont Lithium is one of those mining companies.
In 2020, Tesla signed an agreement with Piedmont Lithium, a company developing a lithium project in North Carolina.
The automaker agreed to buy about one-third of Piedmont’s planned 160,000 tonnes of annual spodumene lithium production for at least five years. The first deliveries were planned between July 2022 and July 2023, but the timeline has been delayed, as is often the case with those large mining projects.
Today, Tesla and Piedmont announced that they updated their agreement, with deliveries now planned in the second half of this year:
Now it sounds like the lithium is actually going to come from Piedmont’s Quebec facility in partnership with Sayona Quebec.
Piedmont Lithium President and CEO Keith Phillips commented:
The company’s stock is up 4% on the new agreement with Tesla today.