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30.12.2020

China's Yahua signs a deal with Tesla

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Yahua put the total value of the contract at $630-$880 million

Stocks impacted: Tesla (TSLA), Sichuan Yahua Industrial Group Co Ltd (002497)

Sichuan Yahua Industrial Group Co Ltd signed a deal to supply battery-grade lithium hydroxide to Tesla for the next five years. China’s company didn't specify tonnage figures but put the total value of the contract at $630-$880 million over 2021-25. As a reminder, the U.S. electric vehicle manufacturer recently announced its plan to produce its own battery cells. However, the automaker has also been securing lithium supply for its battery manufacturers prior to planning to build its own batteries. Earlier this year, Yahua increased production at its lithium hydroxide plant by 20,000 tonnes per year, more than doubling its previous capacity. With its new 4680 battery cells, Tesla is planning to achieve several terawatt-hours of battery capacity production per year by the end of the decade.

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