(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 filing with the Shenzhen Stock Exchange set the total value of the contract at $ 630-880 million between 2021-25 .
Tesla, which began delivering the first vehicles from its giant Shanghai plant in December last year, is already supplying lithium – a key ingredient in EV batteries – to China’s Ganfeng Lithium, one of the world’s largest commodity manufacturers.
Tesla did not immediately respond to a request for comment Tuesday.
In May this year, Yahua put into operation a 20,000-tonne lithium hydroxide plant per year, more than doubling its previous capacity, even as prices fell to several-year lows. the background of oversupply and a demand for lithium caused by the coronavirus pandemic.
Reporting by Tom Daly; additional report by Yilei Sun, edited by Louise Heavens