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L&F Cuts Value of Tesla Battery Materials Deal as 4680 Plans Falter

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South Korean battery materials maker L&F said on Monday that the value of its battery material supply agreement with Tesla has been sharply reduced, falling to just $7,386 from an earlier estimate of $2.9 billion. The company did not disclose the specific reasons behind the dramatic revision.

L&F announced in 2023 that it had signed a deal to supply high-nickel cathode materials to Tesla and its affiliates from January 2024 through December 2025. Industry sources and analysts previously said the agreement was intended to support Tesla’s in-house battery production, particularly its next-generation 4680 cells.

Tesla CEO Elon Musk unveiled the 4680 battery plan in 2020, describing it as a breakthrough technology that would lower costs and enable the production of a fully autonomous electric vehicle priced around $25,000. However, progress has been slower than initially projected. As global demand for electric vehicles weakened and Tesla struggled to scale up production of the 4680 cells, the company required far less cathode material than originally expected, analysts said.

Tesla currently uses the 4680 batteries primarily in its Cybertruck, a model that has underperformed sales expectations despite Musk’s earlier forecasts of hundreds of thousands of units annually. Musk has also acknowledged that scaling up Tesla’s new dry electrode battery manufacturing process remains a significant technical challenge.

Market analysts link L&F’s reduced deal value to broader headwinds across the battery and EV sectors. Cho Hyun-ryul, a senior analyst at Samsung Securities, said issues with production yields for the 4680 batteries, combined with slowing EV demand growth, likely contributed to Tesla cutting back orders. He added that uncertainty is spreading across the battery industry as a whole.

The pressure is not limited to L&F. Several battery suppliers have reported order cancellations and the scaling back of joint ventures with major automakers such as General Motors and Ford Motor following the end of U.S. federal EV subsidies in September. South Korea’s battery sector has been particularly affected as automakers reassess electric vehicle strategies amid policy uncertainty and weakening demand.

CATL Resumes Lithium Mining and Refining Operations in Jiangxi Province

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Chinese battery giant CATL (300750.SZ) has resumed operations at its lithium lepidolite mine and refinery in Jiangxi province, according to a spokesperson from its joint venture partner Lopal Tech (603906.SS). This restart is attributed to CATL’s success in reducing production costs at both facilities.

Currently, the operation is producing over 2,000 tons of lithium carbonate per month, with plans to ramp up production to more than 3,000 tons per month as the operation progresses.

Reports emerged last week from UBS, confirming that the mine had resumed production. However, CATL did not respond to Reuters’ request for comment.

CATL’s mine in Jiangxi has been a key contributor to China’s rapidly expanding lithium supplies, which are essential for the production of batteries. The news of its closure in September had previously caused a surge in lithium stocks. The resumption of the mine has had an immediate impact on the market, as lithium miner shares in Australia experienced a drop on Tuesday.

In response to the news, the most-traded November lithium carbonate futures contract on the Guangzhou Futures Exchange closed at 77,300 yuan ($10,578) per metric ton, reflecting a 1.6% drop from the previous day. CATL’s share price on the Shenzhen Stock Exchange also saw a decline of 2.6%, closing at 251.8 yuan.

CATL Resumes Operations at Jiangxi Lithium Mine, UBS Reports

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Chinese battery giant CATL (300750.SZ) is resuming production at its lithium lepidolite mine in Jiangxi province, according to a note from UBS published on Thursday. This comes four months after earlier reports of the mine’s closure sparked a surge in lithium mining stock prices.

UBS’s report indicates that mining operations have “currently resumed,” based on information from Shanghai Metals Market (SMM), though further details were not disclosed. UBS declined to comment further, and CATL did not immediately respond to Reuters’ request for more information.

Two anonymous battery metals traders confirmed that mining activities had indeed restarted at the Jiangxi mine. CATL’s mine in the southern province of Jiangxi has been an important contributor to China’s growing lithium supply, which is essential for the global battery market. When the mine was reportedly closed in September, lithium stocks saw a significant rally.

In response to queries, CATL had previously stated that it adjusted its lithium production in the Yichun area of Jiangxi province. Lepidolite mining is known to be more expensive than extracting lithium from brine, but UBS analysts believe the resumption is driven by low inventories and CATL’s ability to reduce costs by mixing production from this site with higher-grade ores.

On Friday, the most-traded November lithium carbonate futures contract on the Guangzhou Futures Exchange closed at 77,800 yuan ($10,675.81) per metric ton, showing a modest 0.3% increase from the previous day. However, prices are still down by 4.75% from a recent high reached on January 20. CATL’s share price closed at 261.28 yuan per share on Friday, marking a 3.2% increase from Thursday.