<article><p class="lead">China's key lithium producer Ganfeng Lithium has signed a contract with US electric vehicle manufacturer Tesla for supplies of battery-grade lithium hydroxide. </p><p>The contract will run from 1 January 2022 to 31 December 2024. Actual purchase volumes and values will be subject to purchase orders from Tesla. </p><p>The contract is conducive to strengthening the long-term cooperative relationship with Tesla, improving the company's sustainable profitability and ensuring its long-term development, Ganfeng said. </p><p>Ganfeng produced 15,000t of lithium carbonate, 27,000t of lithium hydroxide and 1,600t of lithium metal in 2020, with plans to more than double its lithium hydroxide output in 2021. It has signed long-term supply contracts with key consumers such as LG Chem, Volkswagen and BMW.</p><p>The firm's capacity reached 43,000 t/yr, 81,000 t/yr and 2,000 t/yr for lithium carbonate, lithium hydroxide and lithium metal respectively, at the end of June. It is on track to raise its capacity to more than 200,000 t/yr of lithium carbonate equivalent (LCE) in 2025 and 600,000 t/yr of LCE in the longer term.</p><p>Tesla achieved a production rate of 1mn vehicles/yr across all of its facilities at the end of the third quarter. Its third-quarter production grew to 237,823 vehicles from 145,036 at the same time last year, while deliveries rose to 241,300 vehicles from 139,300 vehicles in that same period. Tesla produced 509,737 vehicles in all of 2020. </p><p>Tesla's Shanghai factory began production in November 2019. The plant had a capacity of 250,000 units/yr in 2020 and sales of 137,459 in the same year, according to China's Automotive Manufacturers Association data. It is projected to raise its capacity to 450,000 units/yr in 2021. </p><p><i>Argus</i> last assessed 56.5pc grade hydroxide prices higher by Yn1,000/t from 26 October at 191,000-199,000 yuan/t ex-works on 28 October in response to rising spodumene feedstock costs and buoyant demand from the NCM/NCA ternary battery sector, particularly the high-nickel ternary battery industry. <i>Argus</i> last assessed export prices at $28.50-29/kg fob China on 26 October, up from $27-27.50/kg fob China a week ago, in response to higher feedstock costs and buoyant demand from the South Korean and Japanese markets.</p><p><div class="picture"><div><span class="pic_title">China's 2020-2021 lithium hydroxide prices</span> <span class="units">yuan/t</span></div><img src="https://argus-public-assets.s3.amazonaws.com/2021/11/01/chinalioh2prices01112021114145.jpg"></div></p></article>
