Tesla Motors is getting closer to obtaining the lithium supply it needs for its electric cars' batteries thanks to a new deal with Canadian company Pure Energy Minerals.
The new agreement announced Wednesday will go towards the development of a lithium mine in Nevada three-and-a-half hours away from the electric automaker's Gigafactory outside of Reno, according to Ars Technica.
As part of the deal, Pure Energy Minerals will provide Tesla with lithium hydroxide for producing the batteries, but it will first need to complete a preliminary economic assessment to confirm that it can begin mining operations in Clayton Valley, Nevada. In return, Tesla, will buy a set amount of lithium for five years at a predetermined price under current market rates.
The agreement proves critical to Tesla's "Nevada Lithium Brine Project," as the company needs a reliable amount of lithium to produce the batteries needed to keep up with demand for its electric cars, Business Insider reported.
A good lithium supply will also help Tesla CEO Elon Musk achieve his goal of building 500,000 vehicles by 2020.
The Gigafactory will be able to provide up to 35 gigawatt-hours of batteries once it is completed, and the first phase of construction for the facility is expected to be finished next year, Ars Technica noted.
The new lithium mine deal is the latest Tesla, following a month after the company announced that it made an agreement with Bacanora Minerals and Rare Earth Minerals to build a lithium mine in Mexico.
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