Korean L&F has secured a $2.9 billion deal to supply battery materials for Tesla. Tesla provides itself with materials for the production of batteries to ensure the production of a large number of its electric vehicles.
Leading South Korean manufacturer of battery materials L&F Co. said on Tuesday it had signed a $2.91 billion deal to supply cathodes, a key component of the batteries, to Tesla, according to The Korean Economics Daily. L&F said in a regulatory filing that it will supply Tesla and its affiliates with a high nickel cathode. The term of the supply is two years from January 1, 2024, to December 31, 2025. The amount of material is expected to ensure the production of about 300,000 electric vehicles each year.
The value of the deal was calculated based on L&F's recent sale price of the cathode and is therefore subject to fluctuations in lithium prices, the company said. The value of the Tesla deal is equivalent to L&F's estimated 2022 sales revenue of 3.88 trillion won.
“Judging from the deal size, Tesla will likely have secured enough high-nickel cathode materials for 300,000 EVs annually for two years,” said Hana Securities analyst Kim Hyun-soo.
L&F, founded in 2000, is one of the top three cathode material manufacturers in Korea. Cathode materials are made up of nickel, lithium, and other materials, and account for about 40% of the cost of EV batteries. L&F is one of the few battery material manufacturers that can mass-produce nickel, cobalt, manganese, and aluminum (NCMA) cathodes. The company is also capable of producing NCM cathodes with high nickel content.
© 2023, Eva Fox | Tesmanian. All rights reserved.
We appreciate your readership! Please share your thoughts in the comment section below.
About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.