Tesla Inks 5-Year Lithium Deal with Chinese Supplier
Materials strategy mimics multi-sourcing battery plans
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
-
on lots of electric trucks. . .Grand Highlander. . .atomically analyzing additive. . .geometric designs. . .Dodge Hornet. . .
EVs slowdown. . .Ram’s latest in electricity. . .the Grand Highlander is. . .additive at the atomic level. . .advanced—and retro—designs. . .the Dodge Hornet. . .Rimac in reverse. . .
-
Plastics: The Tortoise and the Hare
Plastic may not be in the news as much as some automotive materials these days, but its gram-by-gram assimilation could accelerate dramatically.
-
GM Seeks to Avert U.S. Plant Shutdowns Linked to Supplier Bankruptcy
General Motors Co. says it hopes to claim equipment and inventory from a bankrupt interior trim supplier to avoid being forced to idle all 19 of its U.S. assembly plants.