Tesla signs battery material supply deal with two Chinese companies

Credit: Falk Melzer | Instagram

Tesla wants to produce 1.5 million EVs in 2022, but that is only possible if it can find enough batteries. The company has locked down the material supply to make its battery using two big Chinese companies, as shown in its recent filings.

One of Tesla’s upcoming vehicles to benefit from the deal is the Cybertruck, expected to enter production in 2023.

While other traditional car makers like Ford and GM are scrambling to arrange battery supply as they try to transition to EVs, Tesla has an advantage. It has always been a BEV maker and has had a chance to build up its battery supply chain. Its goal is to end 2022 with a total capacity of 2 million cars per year, with a planned growth rate of 50 percent.

Helping it to achieve this growth are Zhejiang Huayou Cobalt Co. and CNGR Advanced Material Co.

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Zhejiang Huayou will become a processed cobalt vendor from July 2022 to Dec 2025, and the prices of the commodity will be subjected to market prices in addition to refining fees. CNGR’s contract runs from 2023 to 2025. The two companies have been supplying Tesla.

Early this year, Tesla secured a nickel supply from a new American mine and added another lithium deal with an Australian miner.

Meanwhile, Samsung SDI is building a pilot line for Tesla’s 4680 battery in South Korea.