(Reuters) – China’s Sichuan Yahua Industrial Group Co. Ltd. said on Tuesday it had signed an agreement to supply quality lithium hydroxide battery to US electric vehicle maker Tesla Inc. for the next five years.
Yahua, based in southwest China’s Sichuan Province, did not provide tonnage figures, but in a presentation to the Shenzhen Stock Exchange, placed the total value of the contract at $ 630-880 million. during 2021-25.
Tesla, which began delivering the first vehicles from its giant factory to Shanghai in December last year, already comes from lithium (a key ingredient in EV batteries) from Chinese company Ganfeng Lithium, one of the world’s largest producers of commodities.
Tesla did not immediately respond to a request for comment on Tuesday.
In May of this year, Yahua put into operation a lithium hydroxide plant of 20,000 tons per year, more than double its previous capacity, even as prices fell to multi-year lows amid a excess supply and demand for lithium caused by the coronavirus pandemic.
Reports by Tom Daly; additional reports by Yilei Sun, edited by Louise Heavens