Tesla has inked a five-year deal to buy lithium hydroxide for its electric vehicle (EV) batteries from China’s Sichuan Yahua Industrial Group Co. Reuters reported citing Yahua’s stock exchange filing.
Per the filing, the total contract value would be about $630-$880 million over 2021-25. Reuters also reported that Tesla (TSLA) already gets lithium from the world’s leading lithium producer Ganfeng Lithium, based in China.
The deal comes as Tesla is set to start selling its electric vehicles (EV) in the Indian market. In an interview with The Indian Express newspaper, India’s transport minister Nitin Gadkari confirmed that Tesla will begin its operations with sales and could later look for assembly and manufacturing facilities, depending upon the sales response. (See TSLA stock analysis on TipRanks)
On Dec. 29, Wedbush analyst Daniel Ives maintained a price target of $715 (7.4% upside potential) and a Hold rating on the stock. Ives believes that Tesla will be able to achieve its target of 500k deliveries of EVs this year, “given the underlying strength we are picking up in China as well as a late push in Europe and the US.”
Ives added, “While there are some logistics speed bumps throughout Europe that could derail a number of deliveries in the next few days, the theme of the Tesla story and overall global EV demand continues to be around white hot demand coming out of China.”
Meanwhile, the consensus among analysts is a Hold based on 11 Holds, 7 Buys and 7 Sells. With shares soaring over 696% year-to-date, the average price target of $458.70 implies downside potential of about 31.1% to current levels.
Related News:
Tesla To Debut In India Early Next Year – Report
Lockheed Martin Delivers 123 F-35 Fighter Jets In 2020 As Covid-19 Hits Supply
FedEx Completes ShopRunner Acquisition; Stock Up 74% YTD
