Tesla’s price may continue to rise in the coming months

Already Piedmont Lithium Inc. Tesla, which is associated with the company, will have to face the rising price of this raw material to ensure the supply of lithium to produce the batteries of its cars. The mining company really wanted to revise the terms of the contract to change the amount per ton to the market price.

In recent years, electric cars have been less elite and are now aimed at the general public with cheaper and more affordable models like the Dacia Spring or Citroën Ami. The evolution was made possible, among other things, by the reduction in the cost of producing batteries kWh decreased from $140 to $132 Between 2020 and 2021. In 2010, it was shown at the level of 1200 dollars. But this decline could eventually be broken…

Rising prices

Indeed, according to one report BloombergCompared to 2021, the price of lithium batteries would actually increase by 7% in 2022. kWh is shown at an average level of 151 dollars. A significant increase, which we owe to the increase in the cost of raw materials. And this is explained by the growing demand at a time when the car market is developing. In France alone, this engine accounted for 13% of those registered in 2022, and then surpassed diesel sales.

according toEuropean Energy Agency (AEI), sales of both electric cars and hybrids will triple between 2018 and 2021, reaching 6.6 million units in the Old Continent. So much so that some experts and automakers feared a battery shortage that would be added to semiconductors but gradually absorbed.

Range of Tesla cars // Source: Tesla

Especially because of this Tesla signed a deal with Piedmont Lithium in 2020, to buy a third of the latter’s 160,000 tons produced annually over the next five years. As the site explains Electrekat that time, the first deliveries were planned between July 2022 and 2023, but these were postponed, while the project to build a mine in North Carolina was postponed.

Meanwhile, the lithium will come from another mine located in Quebec in partnership with Sayona Quebec. Otherwise, Piedmont and Tesla also revised the terms of the contract has been connecting them for several years now. If by then the developer and the mining company had agreed to freeze the price of lithium, the latter would eventually change its strategy and to be able to develop them according to the market.

Tariff varies

Indeed, and as detailed in the press release, “ Under the terms, the price will be determined by a formula-based mechanism based on average market prices for lithium hydroxide monohydrate during the term of the agreement. There will be awards received by Piedmont under the contract with Tesla determined by market prices at the time of each shipment. Thus, the price of raw materials may change with each delivery, which may affect the price list of the range.

And not necessarily in a good way the price of lithium continues to rise. as explained in an article by Bloomberg, this material has increased by 1200% in the last two years. In China, you should really count on 80,000 euros per ton in 2021 versus 40,000 euros. According to a report by the US Geological Survey, lithium consumption increased by 33% A total of 90,000 tons between 2021 and 2020.

The Atacama deposit in Chile, one of the world’s largest sources of lithium // Source: À Contresens

Therefore, you will have to pay more for your Tesla over the next few months or years. Unless the price of lithium drops… However, the brand is currently working on the development of the Model 2, which will use a cheaper 4680 battery and offer more density. A way to be patient while waiting for the arrival of solid state batteries that are cheaper and allow for more than 1000 km of range with ultra-fast, almost instantaneous charging.

In the meantime, the only solution remains reduce the size of batteries, to lower the price of electric cars. Renault boss chose this strategy to achieve parity with thermal models.

Tesla in the USA

Tesla wants to open its own lithium processing plant in the United States. An activity described by Elon Musk as “a license to print money” thanks to the financial return it could bring.
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