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Tesla Secures Long-Term Lithium Hydroxide Supply With Yahua 

This deal comes after the impending expiry of a 3-year deal for lithium hydroxide with Ganfeng Lithium.

Tesla Secures Long-Term Lithium Hydroxide Supply With Yahua  expand View Photos

Highlights

  • Tesla has locked in 5-year lithium hydroxide deal with Yahua
  • Lithium hydroxide is a core ingredient of battery cells that Tesla needs
  • Tesla has been balkanising battery raw material supply with its partners

Tesla has secured a long-term deal for the supply of lithium hydroxide from Chinese industrial grains the Sichuan Yahua Industrial group. This is a 5-year deal which has been reported by Reuters. 

"Yahua, which is based in southwest China's Sichuan province, did not provide tonnage figures but, in a filing to the Shenzhen Stock Exchange, but the total value of the contract at $630-880 million over 2021-25," said the report. 

Lithium hydroxide is a core element for the production of high-density battery cells. Tesla has announced plans to produce its own 4680 tab-less battery cells which could use this lithium hydroxide. Tesla has also been Balkanising battery supply from its partners Panasonic, LG Chem and CATL.

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These new batteries were announced at its recent battery day event

This deal comes after the impending expiry of a 3-year deal for lithium hydroxide with Ganfeng Lithium. Right now, it is not clear if there will be another extension of 3-years. 

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Previously, Tesla also secured a deal to get lithium from Australia and signed a lithium supply agreement with North Carolina mining project that's still in development. 

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Tesla has also acquired 10,000 acres of land in Nevada to mine lithium on its own. It has developed its own extraction technique to achieve several tWh battery capacities per year by the end of the decade. 

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