Welcome to another Tesla Tuesday!
We hear a lot about cars burning fossil fuels. Don’t electric vehicles do the same thing? Batteries rely on raw materials like lithium and nickel. As more companies make plans to build EVs and as the global supply of these materials is in question since Russia is a big supplier, the prices are already going wild.
BOOM!!! Nickel prices surge above $100,000 a tonne on a huge metal short-squeeze. The London Metal Exchange has given a unit of China Construction Bank Corp. extra time to pay $$$$ in margin calls it missed Monday. Do follow @jfarchy for more and read this https://t.co/4lO5xbW3ph pic.twitter.com/BWaJodhiGC— Javier Blas (@JavierBlas) March 8, 2022
Are we trading one resource problem for another? Thankfully, no. While it’s true that as the EV ramp up happens, we’ll be mining materials from the ground, that won’t be the case forever. Those materials can be completely recovered from batteries once their lifespan is over, and there are numerous ways to reuse batteries once they’ve outlived their usefulness for high demand electric vehicle scenarios.
But until a sizable portion of our battery production comes from recycling, there’s going to be a big squeeze on these raw materials. This is one place where Tesla is far ahead of other automakers because they’ve already secured long term supply contracts directly with mining companies and they are producing their own batteries. They control the supply from the ground to the finished product. Other companies can make promises about how many EVs they are going to produce, but if they have no batteries to put in them then their promises are worthless. It will be a challenge for them to overcome Tesla’s current market share while also looking for sources of raw materials at manageable prices.