Tesla Faces Indefinite Delay On Supply Of Lithium Chemicals From Piedmont

Tesla Inc. TSLA is facing an indefinite delay on the supply of lithium chemicals from Piedmont Lithium Inc. PLL, Reuters reported Monday.

What Happened: North Carolina-based Piedmont Lithium said it will delay the first shipments of lithium spodumene concentrate to Tesla from its North Carolina lithium project and does not have a definite date for when it could start deliveries, as per the report.

Piedmont reportedly added that the initial delivery dates contemplated under its existing sales deal with Tesla were extended by mutual agreement with the Elon Musk-led electric vehicle maker.

However, North Carolina officials have expressed concerns about Piedmont’s North Carolina lithium project and may now block or delay it, according to Reuters.

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Why It Matters: It was reported in September last year that under the initial five-year deal, Piedmont would begin supplying Tesla between July 2022 and July 2023 from the North Carolina lithium mine under development.

Tesla is reportedly building a plant in Texas that will convert Piedmont’s spodumene concentrate into lithium hydroxide, which plays a key role in the manufacture of EV batteries.

Lithium-ion batteries, which are used predominantly in EVs, have lithium as the electrode material. Lithium, though conferring high energy distribution, is handicapped by limited availability, higher costs and environmental hazards involved in the mining of this metal.

It was reported last week that China-based Contemporary Amperex Technology Co. Ltd., which supplies batteries to Tesla, unveiled its first-generation sodium-ion batteries, which are a cheaper alternative to widely used lithium-ion batteries.

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Price Action: Piedmont Lithium shares closed almost 0.4% lower in Monday’s regular trading session at $54.87 and further declined almost 0.6% in the after-hours session to $54.55.

Tesla shares closed almost 3.3% higher in the regular trading session at $709.67 and further rose almost 0.8% in the after-hours session to $715.00.

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