However, there is another interesting detail that may change the angle at which we view this issue. In September, Ganfeng revealed that it has an agreement with Tesla to supply the EV maker with 20% of its annual lithium hydroxide production through 2020, which could be extended by three years. Tesla's push into mining is at the center of a plan to cut battery costs and deliver on a promise to bring a $25,000 electric car to market. Cumulative Growth of a $10,000 Investment in Stock Advisor, Who Are Tesla's Lithium Suppliers? The long-term demand picture remains bright because the EV revolution is still in the early innings. And here is Panasonic, Tesla's long-standing lithium-ion cell supplier for all models, which for a long time was an exclusive partner. Tesla has indicated to battery metals suppliers that it is going to need a ‘ton of lithium’ to satisfy its battery production needs, thereby paving the way for more and larger supply deals for the product. Pure Energy Minerals is developing the Clayton Valley South Lithium Brine project in Nevada, which is located adjacent to the only producing lithium mine in the U.S., Albemarle's Silver Peak lithium brine operation. According to company press releases and/or published reports, the following companies have or have had some type of agreement in place to supply Tesla with lithium hydroxide. Tesla Inc 's Suppliers recorded increase in sales by 1.21 % year on year in Q4 2020, sequentially sales grew by 23.45 %, Tesla Inc recorded increase in cost of sales by 44.81 % year on year, sequentially cost of sales grew by 29.37 % in Q4. This dynamic resulted in lithium prices soaring in 2016 and 2017, along with the stock prices of producers, such as diversified chemical giants Albemarle (NYSE:ALB) and SQM (NYSE:SQM). Tesla's lithium suppliers. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. the only producing lithium mine in the U.S. According to company press releases and/or published reports, the following companies have or … As the world continues to embrace EVs, lithium will also continue to become more and more valuable to automakers. On Tuesday, China’s Sichuan Yahua Industrial Group Co. announced that it had signed a five-year contract to supply Tesla’s lithium hydroxide, according to Automotive News. Check out the latest earnings call transcripts for Tesla and other companies we cover. Kidman's shares are listed on the Australian Securities Exchange (ASX) and also trade over the counter in the U.S, but the OTC shares are extremely thinly traded, which means volatility could be considerable. • More on TSLA Suppliers Glencore, which is the largest industrial supplier of cobalt in the world, could provide Tesla with up to 6,000 tons of cobalt a year under the long-term partnership. The company said that the agreement "equates to less than 25% of Kidman's portion of initial nameplate production for the first three years from the refinery." Tesla already purchases lithium in China from the company Ganfeng. In May, Yahua began operating a new lithium hydroxide plant which is capable of producing 20,000 tons per year of the compound. Palo Alto, Calif. – Panasonic corporation and Tesla Motors finalized a supply agreement for automotive-grade lithium-ion battery cells. This is a planned future supply agreement with just one of the suppliers of lithium for Tesla. The agreement supplies Tesla with Panasonic’s lithium-ion battery cells to build more than 80,000 vehicles over the next four years. ), Joint venture partners Cadence Minerals and Bacanora Minerals. On Tuesday, China’s Sichuan Yahua Industrial Group Co. announced that it had signed a five-year contract to supply Tesla’s lithium hydroxide, according to Automotive News. Despite the tainted reputations of a number of metal-mining factories caught dumping waste and practicing other environmentally unfriendly habits, one company has managed to land a long-term lithium deal with the electric vehicle (EV) company. Brazilian Lithium Supplier in Talks with EV Makers; Tesla Outlines Next-Gen Battery and Other Future Plans ; To help keep pace with its surging sales, Tesla has signed a five-year contract to buy battery-grade lithium hydroxide from China's Sichuan Yahua Industrial Group. 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This is more than twice the amount of the company’s previous capacity, set to execute on the deal made with Tesla. Tesla has signed a lithium supply agreement with Piedmont Lithium’s North Carolina project — sending the stock price of the latter up 200%. Tesla is reportedly negotiating a long-term deal with a large Swiss-based Cobalt miner to begin supplying its Shanghai Gigafactory with raw materials for the production of lithium-ion battery cells. Stock Advisor launched in February of 2002. And do any of them look like potentially good investments? The agreement runs from 2018 to 2020 and could be extended by three years, Ganfeng said. If that amount represents a small chunk of your overall portfolio then you can certainly speculate but it wouldn’t be prudent to make an all in gamble. Holland lithium project in the Earl Grey hard-rock lithium deposit in Western Australia. Only investors who have a higher-than-average risk tolerance and a long-term focus should consider investing in a lithium producer. Ganfeng is China's largest producer of lithium and the world's second- or third-largest producer (depending on source) behind the United States' Albemarle, and perhaps also behind Chile's SQM. In the fourth quarter of 2018, Albemarle's lithium segment accounted for 37% of its total revenue and 55% of its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). Tesla has been seeking ethical mining practices for years. Tesla Stock Could Surge 104% to $1,000, According to This Analyst, These 3 Stocks Would Be Huge Winners From a Green New Deal, Why Piedmont Lithium, Lithium Americas, and Livent Stocks Exploded Higher Today, Copyright, Trademark and Patent Information. That said, their lithium operations make up a considerable portion of their overall businesses. In November, the company announced the extension of a multi-year supply agreement with Tesla through 2021, with a commitment to deliver greater volumes than in 2020. Image source: Tesla. Lithium doesn’t just get scooped up in Australia and put into Tesla batteries in Giga Nevada. On December 29, 2020, Tesla, Inc. and Tesla Motors Netherlands B.V. (together, “Tesla”) and Panasonic Corporation of North America and Sanyo Electric Co., … So who are Tesla's lithium suppliers? It guarantees the availability of enough cells in 2012 to meet Tesla’s aggressive production ramp-up and fulfillment of more than 6,000 existing Model S reservations. Tesla Model 3. Tesla reaches five-year lithium deal with Chinese supplier – China's Sichuan Yahua Industrial Group Co. said on Tuesday it had signed a deal to supply battery-grade lithium hydroxide to Tesla Inc. for the next five years.Yahua, which is based in southwest China's Sichuan prov… pic.twitter.com/HGg9LtTLLd, — Paul Richardson (@ValleyTuning) December 29, 2020. Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. But there was a more important takeaway for electric vehicle investors: Livent and Tesla added to an existing lithium supply agreement, providing Tesla with additional access to high-quality battery material supplies. Tesla CEO Elon Musk poses with Tesla China-made Model 3 vehicle owners onstage during a delivery event at its Shanghai factory. Tesla's (NASDAQ:TSLA) appetite for lithium is becoming increasingly ravenous as the electric-vehicle (EV) pioneer ramps up production of the Model 3, its first mass-market vehicle. Lithium producer Livent reported a third-quarter loss on Thursday evening. Tesla will designate its battery suppliers to buy lithium-hydroxide products from Ganfeng Lithium Co. and its unit, the Jiangxi-based company said in a filing to the Shenzhen exchange on Friday. U.S. investors interested in the lithium space might consider further exploring the three largest lithium players traded on a major U.S. stock exchange: Albemarle, SQM, and Livent (NYSE:LTHM), the last of which is a Philadelphia-based company that was formerly FMC's lithium business and is now fully independent. Shares of Ganfeng are not listed on a major U.S. stock exchange, nor do they trade over the counter (OTC) in the U.S. For this reason, along with the fact that Kidman is a developmental stage company that's not profitable, the stock is not a good fit for most U.S. investors. That's because lithium supply has been having a hard time keeping up with demand, thanks largely to the rising popularity of EVs. conditional long-term lithium hydroxide supply agreement with Tesla, according to published reports. Livent is known for its relationship with Tesla, being one of its main lithium hydroxide suppliers. Lithium prices started falling off their peaks last year, which along with concerns about China's slowing growth and too much new production capacity coming online, contributed to stock prices plummeting. Or you could go broad and buy an ETF tracking a basket of lithium stocks. Tesla also sources lithium from China’s Ganfeng Lithium, among others, though the company’s supply needs are through the roof right now as the world begins a major transition to EVs. The precursor mineral used to create lithium carbonate or lithium hydroxide is … Another Chinese lithium company, Ganfeng Lithium Co. Ltd., is most likely to continue to be the major supplier of lithium hydroxide to Tesla, the analysts wrote. @themotleyfool #stocks $TSLA $SQM $ALB $LTHM, too much new production capacity coming online. Tesla and other companies that need lithium in their manufacturing processes have been eagerly inking longer-term supply agreements with producers to ensure they'll have adequate quantities. 2020 Model Y Deliveries Begin: Official Tesla Video, Video Reveals Unique Tesla Model Y Features. Lithium Americas needs additional capital to develop the mine, and Tesla needs a reliable supplier of lithium. Indeed, when Tesla chose Nevada for the location of its first Gigafactory, industry watchers speculated that the Silver State's plentiful lithium supply was one main reason. Panasonic is the world’s leading battery cell manufacturer and a diverse supplier to the global automotive industry. Tesla took one step to ensure part of its lithium needs by signing a sales agreement with Piedmont Lithium (PLL) this past week. Zachary Visconti is a writer with a knack for electric vehicles, technology, and climate change. Neither company's stock is listed on a major U.S. stock exchange, nor is either company profitable on an operating basis. The company recently inked a supply deal with Piedmont, which could turn it into a Tesla lithium supplier. 14 Management also indicated that they are working to extend their partnership for 2022 and beyond. Returns as of 04/17/2021. According to Pure Energy's Sept. 2015 press release, "provided that Pure Energy meets certain terms and conditions ... the Agreement establishes a commitment for an annual purchase volume of product over a period of 5 years by Tesla and/or its authorized purchasers.". The deal is valued at $630 million-$880 million through 2025. However, the key variable is how long it will take for enough new supply to be brought online to cause an oversupply situation, or at least to cause prices to drop considerably. For these reasons, their stocks are not good choices for most U.S. investors. Thus most U.S. investors looking for exposure to the lithium realm should explore other options. In September, Ganfeng revealed that it has an agreement with Tesla to supply the EV maker with 20% of its annual lithium hydroxide production through … Tesla has been sourcing lithium hydroxide from Ganfeng since 2018. In May 2018, Kidman entered into an offtake agreement with Tesla "for an initial term of three years on a fixed-price take-or-pay basis from the delivery of first product," according to Kidman's press release, adding that the agreement "contains two 3-year term options." SQM's lithium business comprised 41% of its total revenue and approximately 50% of its consolidated gross profit. In September, Ganfeng revealed that it has an agreement with Tesla to supply the EV maker with 20% of its annual lithium hydroxide production through … The Electric Vehicle Revolution: Is It Really Different This Time? Market data powered by FactSet and Web Financial Group. Unlike many of the smaller lithium players, all three companies are profitable. Analysts cited by Reuters said the additional Yahua deal underscored Tesla’s “huge demand” for battery-grade lithium hydroxide, “especially given the ramp-up of Model Y production in Shanghai.” Ganfeng, however, would likely remain Tesla’s largest lithium supplier. In Aug. 2015, they signed a conditional long-term lithium hydroxide supply agreement with Tesla, according to published reports. Lithium producer Livent reported a third-quarter loss on Thursday evening. Below is a list of some of the purported key suppliers for Tesla's manufacturing production, along with the components they supply: AGC Automotive: windshields Brembo: brakes Klein pointed out that when Tesla first opened the Nevada Gigafactory, it had an annual production target of 35 GWh, and Tesla would require 25,000 tons of lithium per year to … Who even says they can produce lithium profitably or even meet the milestones Tesla has laid out? We’re motley! Tesla Motors found its first lithium suppliers for the Gigafactory - Rare Earth Minerals and Bacanora Minerals, two companies that are already interconnected in the … Cadence Minerals (which was named Rare Earth Minerals until March 2017) and Bacanora Minerals are JV partners in the Sonora Lithium Project in Northern Mexico. Currently a supplier of lithium hydroxide for Tesla, Livent hopes that it will be able to expand its partnership past 2021. Piedmont stock more than … Kidman Resources has a 50/50 joint venture with SQM to develop its Mt.