Piedmont Lithium Soars On Tesla Partnership For Electric Car Batteries By Investors Business Daily
Piedmont Lithium (PLL) on Monday announced a multiyear lithium supply deal with Tesla (TSLA). Piedmont Lithium stock catapulted on the news.
Australian miner Piedmont Lithium said Monday the fixed-price binding agreement to supply spodumene for Tesla electric cars is for a five-year term, with the option to extend the pact for an additional five years.
The Tesla pact represents the start of the first domestic U.S. lithium supply chain, Piedmont Chief Executive Keith D. Phillips said. It also “confirms the trend toward spodumene as the preferred feedstock for the lithium hydroxide required in high-nickel batteries,” he added. Chile, Australia, Argentina, China and Zimbabwe currently dominate world lithium production.
Lithium is a key component in batteries for electric cars. Electric-car sales have rebounded strongly in China this year, and are growing in Europe. Meanwhile, a supercharged Tesla has fueled the rise of several electric-car stocks.
Shares of Piedmont Lithium soared 236% to 37 on the stock market.
Piedmont Lithium Stock, Electric-Car Stocks
Piedmont stock is extended from a 9.29 buy point cleared Sept. 17. Tesla stock gained 3.4% to 421.20 Monday, after its Battery Day event last week disappointed many investors. Global X Lithium Battery Technology ETF (LIT) added 1.5% Monday, rallying so far this year after a long downtrend.
Among other electric-car stocks, Nikola (NKLA), which has lost more than half its value due to allegations of fraud, fell 0.8%. General Motors (GM), which is partnering with Nikola, rose 1.5%, bouncing off the 50-day line.
Tesla stock is extended from a pullback to the 10-week line. The buy zone started around 368.
Separately in a note Monday, Morgan Stanley analysts gave a strong lithium outlook. They wrote that “2021 should see lithium’s market closer to balance as supply cuts bite and demand recovers, but the large volume of latent hardrock capacity and continued brine expansions cap price upside.”
Under the new agreement, Piedmont will supply one-third of its planned production of 160,000 tons per year of spodumene concentrate to Tesla, for the initial five years. The miner has high-grade deposits in North Carolina.
Piedmont Lithium’s agreement with Tesla is conditional upon a delivery start date between July 2022 and July 2023.
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