This morning, Tesla (TSLA -6.37%) inked a "five-year fixed-price binding agreement" to secure lithium supplies from Australian miner Piedmont Lithium (NYSE: PLL). News of the deal sent Tesla shares 3% higher in morning trading and is spilling over to boost the share prices of a host of other electric vehicle stocks.
In particular, shares of special purpose acquisition company Tortoise Acquisition (SHLL), which aims to bring electric-truck drivetrain maker Hyliion public in a reverse merger IPO this week, were up 11% this morning. Similarly, shell company DiamondPeak Holdings (DPHC), which is helping to IPO electric-pickup maker Lordstown Motors, was driving 5.2% higher.
Meanwhile, Graf Industrial (GRAF), which plans to merge with autonomous-car lidar maker Velodyne Lidar, was positively putting the pedal to the metal -- up 16.7%.
Tesla's lithium agreement isn't the only news item moving these stocks, although it's the most obvious.
Shareholders of Tortoise Acquisition were voting on the merger with Hyliion this morning. Similarly, Graf Industrial will hold a special meeting to vote on its merger with Velodyne tomorrow.
DiamondPeak held its vote approving its absorption of Lordstown early last month.
The fact that DiamondPeak's stock is moving along with all the rest, though, suggests that a big part of each stock's share price move today is due to the Tesla lithium news and what it means for electric vehicles in general.
The logic being that, if Tesla is moving to secure a supply of lithium for five (and perhaps 10) years into the future, then it must be anticipating a surge in demand for electric vehicles of all stripes, not just its own. It's grabbing supply now to ensure that when electric trucks from Hyliion and Lordstown start crowding onto the highways next to it, Tesla's production rates won't be constrained by an inability to produce batteries.
This theory only grows stronger when viewed in the context of today's other news, that Tesla is trying to buy a 10% stake in LG Chem's battery business, as reported in the Korea Times this morning.
One interpretation of all this might be that Tesla is locking up lithium supplies and there won't be enough left for Hyliion and Lordstown. That doesn't seem to be the way investors are taking the news today, however. The fact that they're bidding up lidar stock Graf, too -- despite knowing that Tesla famously eschews the use of lidar -- suggests investors believe this story is much bigger than one about Tesla alone.