Tesla needs lots of lithium to keep its ambitious expansion plans going. It has amended its agreement with Piedmont Lithium on the supply of the crucial raw material through 2025, and that lithium will be coming from Quebec.
The EV maker is deeply involved in its own battery supply. It has begun manufacturing its new 4680 battery cell, reaching an important milestone last month. However, it needs an ample supply of raw materials, including lithium, nickel, cobalt, etc.
Tesla has entered agreements with large mining companies for lithium supply. However, it is not limiting itself to these as it is also teaming up with smaller mining companies. The contract allows these upcoming companies to get enough cash to finance new mining projects.
Piedmont Lithium falls in this category of mining companies. It had entered a contract with Tesla when it began developing a mining site in North Carolina in 2020. Tesla would buy one-third of Piedmont’s projected 160,000 tonnes of annual lithium output for at least five years.
The date of the first delivery has been delayed but the two companies have amended their contract. Piedmont will now deliver 125,000 metric tons of lithium from 2023 to 2025, with an option to extend the agreement for another three years.
According to a joint statement:
“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 2023 through the end of 2025.”
Keith Phillips, Piedmont Lithium President and CEO confirmed the lithium would be coming from Quebec.
“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 2020 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.”
