The Vulcan Energy Resources Ltd (ASX: VUL) share price is soaring higher today on the back of a deal with European car manufacturer, Renault.
Renault has agreed to purchase between 26,000 and 32,000 metric tonnes of Vulcan's battery-grade lithium chemicals over 6 years.
At the time of writing, the Vulcan share price is $11.22, 10.22% higher than its previous close.
Let's take a closer look at today's news from the potentially soon-to-be lithium producer.
Vulcan share price surges on EV deal
The Vulcan share price is surging higher after the company announced it has agreed to supply Renault with battery grade lithium from 2026.
Renault will be putting the material towards its goal of producing a 'made in Europe' electric vehicle line.
Vulcan's zero-carbon lithium is expected to cut each of Renault's 50-kilowatt-hour battery's carbon emissions output by between 300 kilograms and 700 kilograms.
The pricing of Vulcan's materials will be based on the going market rate at the time of sale. It will be on a take-or-pay basis.
However, as my Foolish colleague James reported earlier, the deal appears to involve less than it was initially promised to.
The companies previously signed a term sheet stating Renault would buy a maximum of 85,000 metric tonnes over 5 years.
Vulcan managing director Dr Francis Wedin commented on the agreement moving the company's share price today, saying:
The completion of this definitive offtake agreement means Vulcan's Zero Carbon Lithium business will be directly enabling Renault to meet its commitment of producing carbon-free [electric vehicle] batteries and becoming carbon neutral… the agreement is consistent with our strategy to enter into long term, stable supply agreements with companies that share our ethos on sustainability and decarbonisation ambitions.
Right now, the Vulcan share price is 307% higher than it was at the start of 2021. However, it's still 17% lower than it was this time last month.
