Yahua put the contract value at $630 million to $880 million, according to a Shenzhen Stock Exchange filing, Reuters reported. That means 63,000 to 88,000 tonnes of lithium, according to Daiwa Capital Markets.
“Tesla has long sought lithium suppliers in various regions to help with electric vehicle battery production,” Teslarati reports. It “evidently required more than its current partners can supply, especially with production and delivery goals continuing to increase year-over-year.”
Cowen analyst Jeffrey Osborne forecast Tuesday that Tesla will register deliveries of 181,500 cars for this quarter, up 16% from his prior estimate of 156,500, Reuters reports. He raised his price target on the company to $380 from $300, while maintaining his market perform rating.
To be sure, quality control remains an issue for next year, especially in light of China’s recall of 30,000 vehicles for a suspension problem, Osborne said.
In any case, “China is going to be very important for Tesla in the next five years, as more than half of Tesla models in 2021 will be made in China,” according to car site Torque News.
The company already is delivering Model 3 vehicles from its Giga Shanghai factory and has reportedly started making Model Y vehicles there that it will deliver soon. Tesla also gets lithium from China’s Ganfeng Lithium, one of the world’s largest producers of the material.
Tesla recently traded at $659.45, down 0.64%, but has skyrocketed 689% year to date amid market mania for EV stocks.