Tesla signed another three years of lithium salt single high nickel ternary to usher in the highlight moment?

As soon as the three quarterly reports ended, Ganfeng Lithium, the leader of lithium salt, issued an important announcement on the first day of November. Ganfeng Lithium and its wholly-owned subsidiary Ganfeng International signed a "product supply contract" with Tesla. It is agreed that from January 1, 2022 to December 31, 2024, the company and Ganfeng International will supply battery-grade lithium hydroxide products to Tesla. The actual purchase quantity and sales amount shall be subject to the purchase order issued by Tesla.

This is not the first cooperation between the two leading companies. In 2018, before the new energy vehicles broke out on a large scale, Ganfeng Lithium signed a three-year contract with Tesla until December 31, 2020. the product is also a battery-grade lithium hydroxide product, and the purchase quantity is about 20% of the company's total production capacity that year.

The reason why there is an one-year gap between the two contracts between Ganfeng Lithium Industry and Tesla is not because Tesla's demand for lithium hydroxide has declined, but because Tesla signed a similar contract with another leading lithium salt enterprise, Yahua Group, on December 29th, 2020. In December 2020, Ya'an Lithium Industry, a wholly-owned subsidiary of Yahua Group, signed a supply contract for battery-grade lithium hydroxide with Tesla. Tesla will purchase battery-grade lithium hydroxide products worth a total of US $630 million-US $880 million from Ya'an Lithium Industry from 2021 to 2025.

So the conclusion is on the contrary. Ganfeng Lithium Industry's contract is more of a supplement, but it reflects Tesla's increased demand for lithium hydroxide, which is mainly used in high-nickel ternary lithium batteries. Tesla's move is to add high-nickel ternary?

Although both lithium hydroxide and lithium carbonate have continued to soar since the fourth quarter of last year because they are important resources for power batteries, there is still a big gap between the price increase of lithium hydroxide and that of lithium carbonate (compared with the 286% increase in lithium hydroxide and 382% increase in lithium carbonate in November last year).

In mid-2020, with the gradual decline of subsidies for new energy vehicles, the development of BYD's blade battery technology and Ningde era's CTP technology, the lower cost and improved overall performance of lithium iron phosphate batteries once again entered the field of vision of terminal car companies. On the other hand, the reason is that under the leadership of Tesla, the leader of new energy vehicles, A number of car companies, including Xiaopeng, a new car maker, and Daimler, a traditional carmaker, have begun to turn to lithium iron phosphate batteries, which not only makes lithium carbonate rise more than lithium hydroxide, but also surpasses lithium hydroxide for the first time since 2018.

However, the terminal demand for lithium hydroxide is actually not low. It is undeniable that lithium iron phosphate batteries have increased greatly in terms of production, sales and loading since the beginning of this year. Even in the latest September data, it completely surpassed ternary lithium batteries (58.3% of lithium iron phosphate batteries, 56.9% of sales and 60% of vehicles).

Lithium carbonate is mainly used in lithium iron phosphate batteries and low-nickel ordinary ternary lithium batteries with less than 6 series. 8-series and above high-nickel ternary lithium batteries all use lithium hydroxide. Although the proportion of ternary lithium batteries has decreased, according to the split of domestic ternary material models, the share of high-nickel ternary lithium batteries increased to 38.6% from January to September 2021, up from 23.1% in 2020. In 2019, it is only 12.7%, which is not as high as lithium iron phosphate batteries. And with the improvement of consumers' requirements for vehicle life and cost, the iteration of ternary high-nickel material system batteries continues. In addition to the existing and more mature ternary 8-series lithium batteries, positive and battery manufacturers are also developing and promoting 9-series ternary lithium batteries, NCMA quaternary lithium batteries and cobalt-free NM lithium batteries.

This is the case in China, overseas new energy vehicles are mainly based on ternary high nickel lithium batteries, and even in Japan and South Korea, ternary lithium batteries are used instead of lithium iron phosphate batteries, which are commonly used in China. Although Tesla, as the leader of new energy vehicles, has indicated that he is inclined to lithium iron phosphate batteries, which has caused many car companies to follow suit, but at present, traditional car brands such as Mercedes-Benz only consider using lithium iron phosphate batteries in entry-level models, while high-end models still use ternary lithium batteries.

Finally, in terms of cost, the cost pressure caused by the high price of nickel and cobalt has been technically reduced by reducing the content of cobalt or even removing cobalt completely, and the prices of nickel and cobalt are not as strong as those of lithium. at present, the price of nickel and cobalt has declined, so it is expected to be a duo situation of lithium iron phosphate battery and high nickel ternary lithium battery in the next five years.