Tesla partners two Chinese suppliers for EV battery materials
US EV giant Tesla has signed two new long-term deals with two of its existing Chinese battery-materials suppliers, in order to secure supplies for electric vehicle batteries amid intensifying competition. Tesla has signed a deal with Zhejiang Huayou Cobalt Co. and CNGR Advanced Material Co. for until the middle of this decade. The deals include sourcing materials for ternary precursor materials and chemical cocktails that are key to storing energy in lithium-ion batteries.
The announcements come as major automakers look to scoop up battery metals in the face of a looming shortage. General Motors also unveiled deals to buy inputs ranging from lithium to cathode materials last week, shortly after Ford Motor Co. revealed a list of suppliers with raw materials including Argentinean lithium and Indonesian nickel.
For Tesla, Huayou Cobalt will supply materials to the automaker from July 1, 2022 till the end of 2025. The miner said the prices of the products will be subject to market prices for nickel, cobalt and manganese, as well as refining fees. CNGR will supply the EV automaker between 2023 and 2025.
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Thanks to the transition to cleaner energy and rising demand for electric vehicles, the demand for battery ingredients has been increasing too, while supply has been hampered by Covid-related logistical woes and a lack of investment. That’s pushing up the prices of the raw materials and is denting profitability for some carmakers.
Both Huayou and CNGR are among the top direct suppliers named by Tesla in its 2021 annual impact report. CNGR has also supplied battery material to Tesla from 2020 until this year.
(with inputs from Bloomberg)