Tesla Inc. is set to pay more for the lithium that powers its electric vehicles after a supplier amended their deal amid a relentless price rally of the metal.
Piedmont Lithium Inc. will now supply an increased 125,000 metric tons of lithium concentrate to the EV giant starting in the second half of this year through the end of 2025, according to a statement Tuesday. Unlike prior agreements where prices are locked in, Piedmont’s deal with Tesla relies on a floating mechanism based on market prices, according to the statement.
The change in the supply agreement between Piedmont and Tesla is “significant” because the EV giant typically has fixed prices for the materials it needs for batteries, according to analyst David Deckelbaum at Cowen & Co.
“As more contracts shift toward variable pricing, Tesla’s lithium costs inevitably move higher,” Deckelbaum said in an email.
For the rest of this article: https://www.bnnbloomberg.ca/tesla-faces-higher-lithium-prices-as-supplier-amends-deal-1.1865284