Tesla Has Signed Contracts with Two Major Chinese Suppliers for Battery Materials

Photo: Tesla

Tesla has entered into long-term deals with two major Chinese suppliers for the supply of materials for the production of batteries. The manufacturer continues to increase efforts to bolster its supply of production materials, the shortage of which will become an acute problem in a few years.

Tesla has signed new long-term agreements with two of its existing Chinese battery material suppliers, Bloomberg reports. According to separate listings by the companies, Zhejiang Huayou Cobalt Co. and CNGR Advanced Material Co. signed pricing agreements with the manufacturer for deliveries until 2025. The deals involve ternary precursor materials, which are a key component in storing energy in lithium-ion batteries.

Battery materials are a major challenge the industry may face in the coming years. Although this problem will not be acute in the next couple of years, after more automakers switch to the production of electric vehicles, the situation will change dramatically. That is why Tesla is committed to ensuring the supply of the necessary materials right now.

Huayou Cobalt will start supplying Tesla materials from July 1, 2022, until the end of 2025. The mining company said product prices will depend on market prices for nickel, cobalt, and manganese, as well as processing fees. CNGR will supply materials to the manufacturer between 2023 and 2025.

Both Huayou and CNGR have already been Tesla's direct suppliers and are mentioned in the 2021 report. CNGR said in a statement that it began supplying Tesla from 2020.

© 2022, Eva Fox | Tesmanian. All rights reserved.

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