Tesla signed deals with two Chinese battery material suppliers to secure the supply of its electric vehicle batteries. The two Chinese companies are Zhejiang Huayou Cobalt Co. and CNGR Advanced Materials Co.
This collaboration will last until the middle of this decade or around 2025. The partnership will also involve sourcing materials for ternary precursor materials and chemical cocktails which are key to storing energy in Lithium-ion batteries.
In this collaboration, Hoayou Cobalt will supply battery material to Tesla from July 1, 2022 until the end of 2025. While CNGR will supply Tesla electric car battery material between 2023 and 2025.
Tesla’s collaboration with an electric car battery supplier from China comes after a number of major car manufacturers are struggling to meet the supply of EV batteries. Before Tesla, General Motors to Ford Motor Co., have also announced cooperation to supply their electric vehicle batteries.
Thanks to the transition to electrification which has increased demand for electric vehicles, this has also led to an increase in the demand for battery materials. Supply and logistics problems due to Covid-19 have pushed up the price of raw materials for batteries and made several car manufacturers suffer losses.
Huayou and CNGR are among the top direct suppliers to Tesla. Chinese company CNGR has been supplying battery material to Tesla from 2020 until this year.