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Jan. 3 (UPI) — Following a banner year for EV maker Tesla, U.S.-based Piedmont Lithium said Tuesday it extended an agreement with the company to supply it with lithium minerals that form the basic material for vehicle batteries.
Both parties said they agreed to amend an existing offtake agreement brokered in 2020 for supplies of spodumene concentrate, or SC6, a mineral source of lithium that forms the raw material for batteries used in electric vehicles.
The initial deal called for the supply of around 160,000 tons of SP6 a year from a deposit in North Carolina. The modified arrangement mandates the delivery of 125,000 tons of SP6 sourced from a project in Quebec through the end of 2025.
Production from Quebec is expected to begin during the second half of the year.
“The electric vehicle and critical battery materials landscape has changed significantly since 2020 and this agreement reflects the importance of — and growing demand for — a North American lithium supply chain,” Piedmont Lithium President and CEO Keith Phillips said. “This agreement helps to ensure that these critical resources from Quebec remain in North America and support the mission of the Inflation Reduction Act to bolster the U.S. supply chain, the clean energy economy, and global decarbonization.”
U.S. President Joe Biden’s signature Inflation Reduction Act allows for tax credits for the purchase of an electric vehicle provided that it’s assembled in North America. Starting this year, 50% of the battery components also need to be made in North America.
Tesla produced 439,701 vehicles and delivered 405,275 during the fourth quarter of 2022. Vehicle deliveries were up 40% from the same period in 2022, while production increased 47% year-on-year. For the full year, the total was 1.37 million and 1.31 million, respectively.
Prices for SP6 could be volatile for Tesla given the arrangement was modified from a fixed-term deal to one based on market prices at the time of each shipment.
