Tesla’s attempt to move into raw materials production could pave the way for other carmakers as they attempt to transition to mass market electric vehicle (EV) production, ushering in the pursuit of more vertically integrated supply chains for the auto sector.
Raw materials have always been a key obstacle to EVs going mass market. Until now, most carmakers have relied on a more separated, globalised supply chain. Tesla’s move into the space could go some way to meeting a projected 1.79mn t/yr demand by 2030, according to Chile’s state mining agency Cochilco.
Last week, Tesla unveiled plans to produce lithium from clay in the Nevada desert, and today it announced an agreement with Piedmont for the supply of lithium spodumene from the mine developer’s North Carolina deposit.
But Tesla chief executive Elon Musk may look further than lithium, with market participants predicting supply bottlenecks for cobalt and nickel in the coming years. “I’d just like to re-emphasise, any mining companies out there, please mine more nickel,” said Musk during Tesla’s last quarterly conference call.
“Wherever you are in the world, please mine more nickel… Tesla will give you a giant contract for a long period of time, if you mine nickel efficiently and in an environmentally sensitive way.”
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