Tesla CEO Elon Musk has reportedly urged the mining community to produce more nickel, as demand for electric vehicles (EVs) continues to grow.
Nickel of course is a key ingredient in the batteries used by EVs, and the cost of batteries continuing to be a big challenge in growing the EV market.
Musk made the plea for more nickel on a post-earnings call on Wednesday, during which Tesla revealed it had shrugged off the economic downturn caused by the Coronavirus pandemic to post its fourth quarterly profit in a row.
“Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way,” Musk was quoted as saying by Reuters on the earnings call.
Nickel makes batteries energy dense so EVs can run further on a single charge.
But Musk’s call for more nickel mining comes at a time when prices for battery materials are very low, and analysts says the volumes that Tesla needs are unlikely to make a compelling business case for miners to invest in increased production.
Tesla currently sources nickel-cobalt-manganese (NCM) batteries from South Korea’s LG Chem and nickel-cobalt-aluminium (NCA) batteries from Japan’s Panasonic.
These firms in turn purchase nickel indirectly from mining companies.
According to Reuters, there are three key suppliers – Brazil’s Vale, which operates in Canada using some hydropower, Russia’s Norilsk Nickel and BHP Group’s operations in Western Australia.
Tesla on Wednesday posted a $104m (£82m) profit for its second-quarter, but revenue fell roughly 5 percent to $6bn.
Musk told reporters and investors he would prioritise growth over profit going forward, and focus on making Tesla vehicles more affordable.
“The real limitation on Tesla growth is cell production at affordable price. That’s the real limit,” Musk said, adding the company would expand its business with Panasonic and China’s Contemporary Amperex Technology (CATL) and “possibly with others”.
Tesla is expected to reveal technological advances at its “Battery Day” event, now to be held in September.
Tesla had been expected to introduce a low-cost, long-life battery in vehicles for the Chinese market later this year or early in 2021.
The idea is to bring electric car costs into line with conventional models, making them more accessible.
The “million mile” battery, named for the distance it lasts before needing to be replaced, has been in development with CATL.
Tesla had planned to announce the techExnology at a “Battery Day” originally scheduled for April, but the Coronavirus pandemic pushed it back until May, and then September this year.
Musk has previously told investors that the technology “will blow your mind”.
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