Tesla accepts market-price lithium supply deal

Tesla has amended its arrangement with battery materials supplier Piedmont Lithium. The annual quantities of spodumene concentrate—an ore containing 6% lithium—involved are similar at about 50,000 metric tons, but the length and pricing have changed. The original 2020 supply deal set an undisclosed fixed price for a 5-year term with an optional 5-year extension. The new agreement links the price Tesla will pay to the prevailing market rate for lithium hydroxide at the time of each shipment; it runs for 3 years, with an option to renew for a second 3-year term. Lithium prices are up roughly 1,000% since 2020. Australia’s Core Lithium recently walked away from a supply deal with Tesla, opting instead to sell on the open market.