Electric vehicle (EV) manufacturer, Tesla, has signed a supply deal worth $2.9 billion with South Korean battery cathode material company L&F Co Ltd, according to recent reports from Bloomberg. The deal is for the supply of high-nickel cathode materials and will reportedly commence on January 1, 2024, and end on December 31, 2025.
In a public filing made by L&F on February 28, 2023, the South Korean company revealed that the high-nickel cathode materials will be used in the automotive, energy generation, and storage sectors across the US and other regions. The unit sales price of the materials may fluctuate over the contract period due to changes in lithium prices.
The deal is worth KRW 3.83 trillion, which is approximately four times L&F’s sales for last year. The supplier noted that the total amount of the contract may change depending on fluctuations in exchange rates or raw material prices.
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The announcement of the Tesla deal was met with a positive response from L&F’s investors, with the company’s stock rising as much as 19% on news of the supply deal. The deal is expected to be sufficient to supply over 780,000 EVs, which is good news for Tesla, particularly as high-nickel batteries are expected to be used in the Semi and Cybertruck products.
“This contract is a contract for about 77,000 tons of high-nickel cathode material, which is equivalent to about 783,000 electric vehicles will be supplied,” said Kim Hyeon-soo, a researcher at Hana Securities.
The supply deal could help Tesla ramp up production of its largest products and is a significant step forward for the EV maker as it continues to expand its product line and work towards a more sustainable future.
