Jeep maker Stellantis NV has signed a binding agreement with a lithium hydroxide supplier to provide the mineral for North American electrified vehicle production, the automaker said on Thursday, just as its CEO warns about possible battery shortages in the future.
Australia-based Controlled Thermal Resources Ltd. will supply up to almost 28,000 tons (25,000 metric tons) of lithium hydroxide per year over the 10-year term of the agreement from the Hell's Kitchen Project in California's Imperial County off the Salton Sea. It's expected to begin producing in 2024. A single battery typically uses a few grams of the mineral, which is largely sourced from China today and whose price has increased in recent years. No details were provided on the financial terms of the agreement.
The deal comes after Stellantis CEO Carlos Tavares last week warned about the possibility of an EV battery shortage come 2024 or 2025 ahead of more battery plants coming online and then a shortage in 2027 or 2028 of raw materials to support those plants.
"In the fight against global warming, bolstering our battery electric vehicle supply chain to support our bold electrification ambitions is absolutely critical," Tavares said in a statement. "Ensuring we have a robust, competitive, and low-carbon lithium supply from various partners around the world will enable us to meet our aggressive electric vehicle production plans in a responsible manner."
Stellantis has announced it will produce EV batteries at plants in Windsor, Ontario, with LG Energy Solution starting in 2024 and in Kokomo, Indiana, with Samsung SDI starting in 2025. The company, which is investing $35.5 billion into electrification and software by 2025, says it will have 25 all-electric vehicles in the United States by 2030 that it predicts will represent more than 50% of sales.
The agreement with CTR is larger than the one Stellantis signed with Australia-based Vulcan Energy Resources Ltd. in November to supply lithium hydroxide for production in Europe, where Stellantis says 100% of sales will be all-electric by the end of the decade. That five-year binding agreement to supply battery plants in France, Germany and Italy is for a minimum of more than 89,000 tons and maximum of more than 109,000 tons starting in 2026. Pricing for that deal is based on market prices on a take-or-pay basis.
The Hell's Kitchen Project has an annual capacity of almost 331,000 tons (300,000 metric tons) and is "decarbonized." It will recover lithium from geothermal brines with renewable energy and steam to produce the battery-grade lithium products. The integrated, closed-loop process eliminates the need for evaporation brine ponds, open pit mines and fossil-fueled processing, according to the companies.
In July, General Motors Co. was the first automaker to make a multi-million dollar investment in the project, securing first rights on lithium produced by its first stage.
"This definitive offtake agreement with Stellantis sets a new benchmark for the automotive industry in the United States," CTR CEO Rod Colwell said in a statement. "Securing clean lithium produced with energy from a renewable resource helps to further decarbonize the battery supply chain which in turn, delivers cleaner cars with less environmental impact."©2022 www.detroitnews.com. Visit at detroitnews.com. Distributed by Tribune Content Agency, LLC.