[ad_1]
As electric vehicles continue to to increase in popularity amongst buyers, minerals such as nickel, lithium and cobalt will only become more and more important. Tesla and other automakers’ reliance on these minerals is crucial, and with a new long-term nickel contract and a recently shared list of mineral suppliers, the company is showing its hand for the first time.
Above: Top-down view of mining operations (Photo: Shane McLendon / Unsplash)
According to Reuters, Brazilian nickel miner Vale SA announced a long-term deal with Tesla earlier this month, set to come from the company’s Canadian mining operations. Tesla also shared a list of all of its direct suppliers for both nickel and cobalt, as reported by electrek, which both confirms the Vale announcement and offers some insight as to the automaker’s supply strategy for minerals essential to EV batteries.
Vale will supply Tesla with an ongoing source of low-carbon Class 1 nickel from Canada’s Newfoundland and Labrador, in addition to six other companies producing nickel for the automaker in New Caledonia, Australia and China.
“Congratulations to Vale on signing this significant deal with Tesla to supply the nickel the company needs to make batteries for electric vehicles,” Furey said. “Nickel from right here in Newfoundland and Labrador. Our province is certainly rich in resources the world needs today.”
Above: Analyst discusses Tesla’s ability to navigate supply chain issues and rising raw materials costs for lithium and nickel (YouTube: CNBC Television)
Cobalt and lithium also remain important minerals, and Tesla similarly gets these minerals from a handful of companies. Most of the automaker’s lithium comes from refineries in China, Argentina and the U.S., Tesla gets its cobalt from refineries in China and a mining site in the Democratic Republic of Congo.
Tesla has set a new precedent for automakers and supply deals, as it’s one of the first to build EVs at such a scale and it’s the dominant EV brand available today. Still, growing demand for EVs is set to create massive mineral shortages as competition increases, and setting up a vertically-integrated supply chain with contracts in place will help Tesla in the long run.
With increasing demand, consumers can expect increased EV battery prices, as depicted today with inflation hitting the cost of raw materials — and automakers raising the prices of EVs subsequently.
Most of Tesla’s suppliers weren’t hidden from public view, but the automaker’s release of the supplier list does substantiate what was were only considered rumors prior. Tesla will likely continue to diversify its mineral sources as much as possible, in order to mitigate rising costs amidst skyrocketing demand.
===
Sources: Reuters / electrek / CNBC Television
Posted in
[ad_2]