Where does Tesla get its lithium and do any ASX shares benefit?

When investors look for companies in the electric vehicle (EV) space, they almost inevitably come across tech giant Tesla Inc (NASDAQ: TSLA). The brand has been a cornerstone of the EV revolution so far. And, fortunately for ASX investors, numerous Australian lithium companies are involved with the giant.

Let’s take a closer look at the ASX lithium shares teaming up with Tesla.

Where does Tesla get its lithium?

It hasn’t yet been six months since Tesla co-founder and CEO Elon Musk tweeted the company could be forced to mine and refine lithium itself as prices of the material surged. But that’s yet to happen.

Instead, the EV giant has continued signing supply deals all around the world. Many of which have been with companies listed on the Aussie bourse.

Australia has nearly a quarter of the world’s lithium reserves, according to the US Geological Survey Mineral Commodity Summaries 2022.

Though Lake Resources NL (ASX: LKE) chair Stuart Crow recently told the Financial Times, via the World Economic Forum, “China owns basically 70% [to] 80% of the entire supply chain for electric vehicles and lithium-ion batteries”.

It mightn’t come as a surprise then that Tesla has supply deals with Chinese heavyweights Sichuan Yahua Industrial Group and Ganfeng Lithium.

The former signed a five-year deal with the EV giant back in 2020, Reuters reports. Late last year, the latter also entered a deal to supply lithium to Tesla for three years from 2022, the publication reported.

Tesla also has supply agreements with some Wall Street participants, including Livent.

And looking to Australia, three notable ASX lithium shares are doing business with the EV icon.

3 ASX lithium shares boasting deals with Tesla

Piedmont Lithium Inc (ASX: PLL) got in first. It signed a deal with Tesla way back in 2020.

The agreement covers a five-year term over which the lithium producer will supply Tesla with a third of its North Carolina deposit’s production.

Originally, deliveries were to begin sometime between July 2022 and July 2023. However, according to Reuters, that date has been pushed back.

Two S&P/ASX 200 Index (ASX: XJO) companies have also recently shaken hands with Tesla.

Core Lithium Ltd (ASX: CXO) entered a four-year agreement to supply the vehicle manufacturer with 110,000 tonnes of spodumene concentrate from its Finniss Lithium Project in the Northern Territory in March.

Core Lithium and Tesla now have until October to finish negotiating an off-take agreement. The project’s maiden export is on track to occur before the end of this year.

The final ASX share to have signed on with Tesla is Liontown Resources Limited (ASX: LTR). The company shook on a deal with the tech giant in June.

It agreed to supply up to 150,000 tonnes of spodumene concentrate annually from its Kathleen Valley Lithium Project in Western Australia. The project’s production is expected to kick off in 2024.

The post Where does Tesla get its lithium and do any ASX shares benefit? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why Core Lithium, Mineral Resources, PointsBet, and Strike Energy are dropping
• Why is the Core Lithium share price tumbling 5% on Friday?
• Piedmont Lithium share price falls 5% after plans to build the largest US lithium plant unveiled
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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