What happened between Syrah Resources (ASX:SYR) and Tesla?

Syrah Resources Limited announced it has resolved an alleged default dispute with Tesla, Inc. regarding their supply contract. Tesla has officially withdrawn its intent to terminate the existing agreement after acknowledging that Syrah made sufficient progress to remedy the initial grievance.

What was the core issue in the dispute between Syrah Resources and Tesla?

The dispute centred on the supply of natural graphite active anode material (AAM) from Syrah's 11.25ktpa production facility located in Vidalia, Louisiana. Tesla had previously threatened to terminate the offtake agreement over alleged defaults regarding product compliance and delivery timelines.

Why did Tesla agree to withdraw its contract termination notice?

Tesla withdrew its intent to terminate because Syrah successfully demonstrated the production of conforming active anode material (AAM) samples. The electric vehicle manufacturer acknowledged that the graphite producer has made sufficient progress to cure the alleged default.

Is the Tesla offtake agreement completely secure for Syrah Resources (ASX:SYR) now?

No, the agreement is not entirely secure. While the immediate threat of termination has been lifted, Tesla explicitly reserves the right to terminate the contract in the future if final product qualification for the Vidalia facility material is not fully achieved.

What is the current operational status of Syrah Resources' Vidalia facility?

Syrah's Vidalia facility in Louisiana, which has an 11.25ktpa capacity, is currently moving through advanced stages of qualification testing approvals with Tesla. The company must still achieve final qualification to permanently secure the offtake partnership.

Image for illustrative purposes only. Not a real photo.

Syrah Resources resolves Tesla supply dispute

Written by Liezl GambePublished Jun. 1 2026Last Updated Jun. 1 2026

Australian graphite producer Syrah Resources (ASX:SYR) announced that it has resolved an alleged default dispute with electric vehicle giant Tesla.

Tesla has withdrawn its intent to terminate its existing offtake agreement. The dispute centred on the supply of natural graphite active anode material from Syrah’s 11.25ktpa production facility in Vidalia, Louisiana.

Tesla acknowledged that Syrah has demonstrated the production of conforming AAM samples and made sufficient progress to remedy the initial grievance.

While the immediate threat of termination has been lifted and Syrah moves into advanced stages of qualification testing approvals, Tesla still reserves the right to terminate the contract in the future if final product qualification for the Vidalia material is not fully achieved.

At the time of reporting, Syrah Resources’ share price was $0.13.