Tesla Dodges Nickel Crisis With Secret Deal to Get Supplies via /r/wallstreetbets #stocks #wallstreetbets #investing


Tesla Dodges Nickel Crisis With Secret Deal to Get Supplies

The invasion of Ukraine has added to agita among electric-vehicle makers over the supply of nickel, a critical ingredient in EV batteries, since Russia is one of the world’s biggest producers.

But Tesla Inc. had already been scouring the globe for the metal, signing pacts with several nickel suppliers since 2021.

That includes a multiyear supply deal with mining giant Vale SA. The agreement, which hasn’t been announced, covers nickel from Canada, according to people familiar with the matter who asked not to be named discussing private details.

Unlike most of its peer automakers, Tesla has spent years focusing on how to secure its own nickel supplies.

The efforts are part of Chief Executive Officer Elon Musk’s focus on vertical integration to maintain control over Tesla’s supply chain. The company jointly operates a massive battery-cell plant outside Reno, Nevada, with Japan’s Panasonic Corp. Tesla buys cells from other leading suppliers but also makes its own.

And the company is constantly pushing for advances in how raw materials are processed and batteries are made. At a presentation in 2020, executives talked about shortening the processing path from mine to cathode.

What Tesla has done with nickel is a hidden competitive advantage, said Gene Munster, managing partner of Loup Ventures. Tesla continues to be a couple of steps ahead of the rest.

Musk has repeatedly flagged nickel supply as the company’s biggest concern as it boosts output, and the metal’s availability is a source of anxiety throughout the EV sector. Battery-sector demand for nickel is expected to jump to about 1.5 million tons in 2030 from 400,745 tons this year, according to BloombergNEF.

“Please mine more nickel,” Musk urged producers on an earnings call two years ago. “Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way.” ••

SOURCE – BLOOMBERG

Submitted March 31, 2022 at 01:21AM by its_me_cindy
via reddit https://ift.tt/QXJ9pRF