(Reuters) – China’s Sichuan Yahua Industrial Group Co Ltd said on Tuesday that it had signed an agreement to supply lithium hydroxide battery to the American electric vehicle maker Tesla Inc for the next five years.
Yahua, in southwest China’s Sichuan province, did not provide tonnage numbers, but, in a file to the Shenzhen Stock Exchange, estimated the total contract value at $ 630-880 million in 2021-25.
Tesla, which started delivering the first vehicles from its gigafactory in Shanghai in December last year, already supplies lithium – a key ingredient in EV batteries – from Ganfeng Lithium in China, one of the world’s largest producers of the commodity.
Tesla did not immediately respond to a request for comment on Tuesday.
In May this year, Yahua put into operation a lithium hydroxide plant of 20,000 tonnes per year, more than doubling its previous capacity, even as prices dropped to several-year lows amid oversupply and a blow to demand of lithium caused by the coronavirus pandemic.
Reporting by Tom Daly; additional reporting by Yilei Sun, edited by Louise Heavens