Tesla Inc. is likely to be forced into paying high market prices for the lithium needed to prodcue lithium-ion (Li-ion) batteries at its Reno, Nevada-based Gigafactory in the US for the facility's initial years of operation, the UK's Financial Times (FT) has reported.
"The current strategy seems to be no direct investment but leveraging the Tesla name by signing 'contingent' contracts at unachievably low prices with junior mining companies who have never produced lithium chemicals," Joe Lowry, founder of consultancy, Global Lithium, told the FT.
In August, Tesla signed its first lithium supply deal with UK and Canada-listed Bacanora Minerals Ltd, which is in the process of developing the Sonora project in Mexico. The announcement caused uproar among Nevada politicians who had hoped Tesla would use a local supplier, given the $1.3bn in tax breaks it had been provided to locate the plant in Reno.
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