Tesla has signed a new updated agreement to secure lithium supply from Piedmont Lithium as automakers rush to secure battery material.
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In order to help accelerate the transition to electric transportation, Tesla has become increasingly involved in the raw material supply chain for battery cells.
Despite only now starting the production of its own cells last year, the automaker has been securing the supply of lithium, nickel, cobalt, and other minerals for its battery cell suppliers for years.
More recently, Tesla started to not only deal with established mining companies, but it also started to sign contracts for offtake agreements with junior mining companies looking to build new mining projects that would increase the supply of some critical resources for batteries.
This strategy helps those companies raise money to build their mining projects.
Piedmont Lithium is one of those mining companies.
In , Tesla signed an agreement with Piedmont Lithium, a company developing a lithium project in North Carolina.
The automaker agreed to buy about one-third of Piedmont&#;s planned 160,000 tonnes of annual spodumene lithium production for at least five years.
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The first deliveries were planned between July and July , but the timeline has been delayed, as is often the case with those large mining projects.
Today, Tesla and Piedmont announced that they updated their agreement, with deliveries now planned in the second half of this year:
Piedmont and Tesla have mutually agreed to amend their previous offtake agreement with the terms of this new agreement, which are binding for a three-year term and include an option to renew for another three years. Under the amended agreement, Piedmont has agreed to deliver approximately 125,000 metric tons of SC6 to Tesla beginning in H2 through the end of .
Now it sounds like the lithium is actually going to come from Piedmont&#;s Quebec facility in partnership with Sayona Quebec.
Piedmont Lithium President and CEO Keith Phillips commented:
We are pleased to be able to partner with Tesla to supply lithium resources produced in North America. The electric vehicle and critical battery materials landscape has changed significantly since and this agreement reflects the importance of &#; and growing demand for &#; a North American lithium supply chain. This agreement helps to ensure that these critical resources from Quebec remain in North America and support the mission of the Inflation Reduction Act to bolster the U.S. supply chain, the clean energy economy, and global decarbonization.
The company&#;s stock is up 4% on the new agreement with Tesla today.
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