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(Reuters) – General Motors Co (NYSE:GM) is prepaying Livent (NYSE:LTHM) Corp $198 million for a guaranteed six-year supply of lithium to build electric vehicle batteries, a deal that underscores surging demand for the metal among automakers.
Both companies had announced the broad brushstrokes of the deal last wek, but Livent announced the financial terms on Tuesday as it posted a nearly tenfold jump in quarterly profit and raised its sales and profit forecast for the year.
Livent, which is set to start supplying GM in 2025, said it expects to receive the prepayment sometime this year.
Automakers like GM “are becoming more focused on securing reliable lithium supply to support their own aggressive electrification plans,” Livent Chief Executive Paul Graves said in a statement.
Philadelphia-based Livent reported second-quarter net income of $60 million, or 31 cents per share, compared with $6.5 million, or 4 cents per share, a year ago.
Livent said its expansions in Argentina and Quebec are on schedule, and that it now expects its 2022 revenue to hit a range of $800 million to $860 million. The company’s 2021 sales were $420 million.
Livent’s stock fell slightly in after-hours trading.
