Automakers want to produce many more electric vehicles. This will require a lot more batteries, so car companies, including Tesla, are lining up all the materials they will need.
Yesterday, two Chinese suppliers of battery materials disclosed agreements with Tesla, according to several reports citing regulatory filings abroad. Tesla, a leader in the electric vehicle business, did not immediately respond to a request for comment.
Zhejiang Huayou Cobalt, a processor of cobalt and other metals, is one of the companies. Cobalt-based electric vehicle batteries generally have higher costs and better range than other alternatives, so automakers often use cobalt in their higher-cost, longer-range vehicles.
The Tesla deal runs from 2022 to 2025. Zhejiang shares gained about 9.1% in overseas trading.
CNGR Advanced Material is the other company. It supplies lithium cathode material to battery manufacturers, taking lithium from miners and processing it further. Its deal with Tesla runs from 2023 to 2025. The stock gained 7.2% on overseas trading.
Tesla shares soared on the news. Tesla’s shares may also be getting a boost from news about electric vehicle deliveries by rivals NIO, XPeng and Li Auto.
The three Chinese companies delivered 31,998 vehicles in July, down from 41,280 in June, but investors had expected a drop because the June figure included the April and May delays as a result of China’s lockdowns to fight Covid-19. Shares of NIO, Li and XPeng trade up between 2.5% and 3% on the New York Stock Exchange.
The Tesla deal comes shortly after General Motors (GM) announced two battery material supply agreements with battery maker LG Chem and lithium miner Livent last week.
In early July, Ford Motor announced a deal with Chinese battery maker Contemporary Amperex Technology for lithium iron phosphate battery cells, a cheaper chemistry than batteries that include cobalt.
Source: CNN Brasil
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