Tesla reaches five-year lithium deal with Chinese supplier

China’s Sichuan Yahua Industrial Team Co. stated on Tuesday it experienced signed a deal to offer battery-grade lithium hydroxide to Tesla Inc. for the future 5 a long time.

Yahua, which is dependent in southwest China’s Sichuan province, did not present tonnage figures but, in a submitting to the Shenzhen Inventory Exchange, put the overall value of the contract at $630 million to $880 million more than 2021-25.

Tesla, which started out delivering the initially motor vehicles from its plant in Shanghai in December previous 12 months, now resources lithium — a essential ingredient in EV batteries — from China’s Ganfeng Lithium, 1 of the world’s greatest producers of the commodity.

Tesla did not immediately answer to a ask for for remark on Tuesday.

In May, Yahua put a twenty,000 tons per 12 months lithium hydroxide plant into procedure, far more than doubling its earlier capability, even as costs languished at multi-12 months lows amid oversupply and a knock to lithium desire introduced about by the coronavirus pandemic.