Magnis Energy Technologies has confirmed they have entered into a binding offtake agreement with Tesla to supply the automaker with Anode Active Materials (AAM) from the company’s proposed production plant in the US.
The Australian mining company confirmed the deal on Tuesday after reports of a potential deal with Tesla emerged over the weekend.
According to a press release from Magnis, Tesla has agreed to purchase a minimum of 17,500 tonnes of AAM per year. The contract will begin in February 2025 and run for a minimum of three years. Tesla has an option to increase their order to as much as 35,000 tonnes each year. The AAM will be supplied at a fixed price, the amount of which has not yet been disclosed.
An offtake agreement is generally one in which a company, in this case Tesla, agrees to purchase all or a portion of the product over a set period, however it is far from final. Offtake agreements come with a set of stipulations, and this deal is conditional on the following:
- Magnis securing a final location for its commercial AAM facility by June 30, 2023,
- Magnis starting production of the commercial AAM facility by February 1, 2025, and
- Magnis producing AAM from a pilot plant by March 31, 2024.
Magnis says they are currently in the process of selecting a final location for their commercial facility, and the development of the pilot plant has already started with orders for the required equipment already placed.
Here is a short video Magnis released on their new offtake agreement with Tesla.