In a bid to enhance its electric vehicle production through the mid-decade, the American electric vehicle giant, Tesla has revealed today that it has secured battery material supply deals with two large Chinese companies.
According to the EV giant, it has secured battery precursor materials through new contracts with Zhejiang Huayou Cobalt Co. and CNGR Advanced Material Co in China.
In separate stock-exchange releases from the businesses, Zhejiang Huayou Cobalt Co. and CNGR Advanced Material Co. entered pricing agreements with the electric-vehicle behemoth for supplies up until the middle of this decade. The agreements are for ternary precursor materials, which are chemical concoctions essential for lithium-ion batteries to store energy.
From July 1, 2022, to the end of 2025, Huayou Cobalt will supply processed cobalt for batteries to Tesla. The miner specified that the costs of refining, as well as market pricing for nickel, cobalt, and manganese, will affect the prices of the products.
CNGR, on the other hand, will supply Tesla between 2023 and 2025 based on the new contract, although both companies had previously been supplying the American EV automaker.
However, it should be noted that the number of electric vehicles that automakers can build will depend on how many long-term battery supplies they can acquire, thus those who are serious about producing electric vehicles are currently working feverishly to do so.
Tesla, which only sells electric vehicles, has been securing a steady supply of batteries for decades, but recently has been able to do so more effectively thanks to its size.
With a production rate of roughly 2 million electric vehicles annually by 2022, the manufacturer hopes to surpass the goals set by its American rivals in just three years. Tesla plans to grow from there at a rate of roughly 50% each year, which will require a huge quantity of battery materials.
Conclusively, these new agreements with Tesla come after several others across the whole battery supply chain. Tesla inked a contract in January to purchase nickel from a brand-new US mine. Follow TechGenyz for more updates.