When Tesla Motors first announced its US$5-billion battery gigafactory in Nevada, the company said it would churn out more lithium ion batteries in 2020 than the whole world produced in 2013.
Now that it’s aiming to deliver 500,000 electric cars by 2018, Tesla will need “unprecedented quantities” of lithium, nickel, cobalt, and aluminum to produce the vehicles’ batteries, Bloomberg Businessweek reports.
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“The world is going to need a lot more lithium ion batteries. Tesla knows that it’s going to have to source the raw materials themselves, and they are competing with China,” said Benchmark Mineral Intelligence Managing Director Simon Moores. “They need to invest in new supply, and they are conducting a global search.”
In addition to automakers in China, where the government wants five million new-energy vehicles on the road by 2020, Tesla will be competing for raw materials against consumer electronics companies that rely heavily on batteries. “To secure the huge number of cells it needs and drive down the cost, Tesla is collapsing the supply chain and bringing battery cell production in-house, in a move reminiscent of Henry Ford in the 1920s,” Bloomberg notes.
Macquarie Research projects world lithium producers will deliver 4,500 tonnes less product than users require this year, before shifting to a slight surplus in 2017. Cobalt was oversupplied in 2015, but is now expected to fall short of demand through 2020, with prices rising as a result, Bloomberg notes. Nickel prices have been low over the last two years, while a global aluminum surplus is expected to persist through 2021.
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