Tesla May Be Seeking New Partners for Lithium at Gigafactory

Supplying lithium for the wildly popular Model 3 may be a hotspot for competitive bids at Tesla’s gigafactory.

Tesla Motors may be stirring the pot by taking more low-cost supplier bids for manufacturing lithium-ion batteries for its upcoming Model 3 at its Nevada factory. According to a Financial Post article, Tesla recently received proposals from two earlier-stage contenders, Pure Energy Minerals Limited and Bacanora Minerals Ltd.

Neither of these metal suppliers has conducted a feasibility study as part of their proposals nor have they ever produced any lithium products, according to the article. Industry insiders have speculated that Tesla may have taken these bids to put pressure on established global lithium suppliers to come down in price.

Tesla may have signed non-binding agreements with these two suppliers. Tesla would have built in grade, tonnage, pricing into the agreement.

SEE ALSO: Workers Walk Off Tesla Gigafactory Site Over Hiring Practices

Other major mining companies have been anticipated to potentially supply Tesla with the lithium needed to build these electric vehicle batteries. According to the article, three major suppliers of 90 percent of the world’s lithium – Albemarle Corporation, SQM, and FMC Corp., have been expected to compete as the primary supplier of lithium for the ambitious gigafactory.

Tesla has been heavily scrutinized on how it’s doing business in Nevada at the battery plant. The state of Nevada is putting pressure on the automaker to meet regulatory guidelines for the $1 billion in tax breaks the state offered to entice Tesla to choose Nevada for its factory. Earlier this year, workers walked off their jobs due to the presence of out-of-state workers. Workers were upset that Tesla contractor Brycon Corporation has been bringing in personnel from New Mexico and Arizona.

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