Continuing with their efforts to secure as much raw materials for electric vehicle (EV) batteries as they can, Tesla has signed a new lithium supply deal.
The latest deal is with Australia’s Liontown Resources, who announced the 5-year deal with Tesla on Wednesday.
“Australian-based battery materials company Liontown Resources Limited is pleased to announce that it has entered into a legally binding sales and purchase term sheet with electric vehicle manufacturer Tesla for the supply of spodumene concentrate,” the company said in a statement.
The deal will see Liontown provide Tesla with 100,000 dry metric tonnes (DMT) of lithium spodumene concentrate from the company’s Kathleen Valley Lithium project in western Australia starting in 2024.
That number will increase to 150,000 DMT for the last four years of the deal, reports Reuters.
The agreement between Tesla and Liontown is conditional on commercial production starting at the Kathleen Valley project by 2025.
Additionally, the two companies will have to complete negotiations and sign definitive agreements by 30 May 2022. If the parties fail to meet this deadline, the date can be extended or the agreement terminated.
This is the second lithium deal in almost as many months for Tesla.
In November they signed a 3-year lithium hydroxide supply deal with China’s Ganfeng Lithium.