Hyundai Motor has signed a long-term lithium hydroxide supply agreement with Ganfeng Lithium. The contract runs from 1 January 2024 to 31 December 2027. The annual supply volume will be executed according to the agreement, the actual purchase volume and sales amount shall be subject to the final purchase orders.

The value of the contract and the volume of the lithium were not specified.

Hyundai also recently signed a four-year lithium hydroxide supply deal with Shenzhen Chengxin Lithium Group.

These mark Hyundai’s first deals to secure lithium directly for EV batteries. Lithium prices have plummeted recently amid growing concerns of oversupply. Analysts suggest Hyundai’s securing of an ample reserve of the key battery material at competitive prices will protect the Korean carmaker from volatile price moves in the future.

Bloomberg NEF forecasts the demand for lithium hydroxide will jump to 1.1 million tons of lithium carbonate equivalent (t LCE) by 2030—10 times more than in 2020.