Musk openly complains that the shortage of nickel supply will be the most worrying problem of future production expansion.

Published: Feb 26, 2021 10:54

Tesla CEO Elon Musk (Elon Musk) tweeted on Thursday evening local time that the company's biggest problem in expanding lithium-ion battery production was the "lack of nickel".

Nickel is a key component of lithium-ion battery for electric vehicles. It puts more energy into the battery and allows manufacturers to use less cobalt because it is more expensive and the supply chain is less transparent. At present, Tesla uses a large number of NCM811 high-nickel batteries, but lithium iron phosphate batteries have been introduced in the standard mileage version.

Data show that nickel supplies could be in short supply as early as 2023. Analysts estimate that nickel supply will be tight in the next two to three years as demand for lithium-ion batteries picks up.

Mr Musk openly shouted at mining companies at the earnings conference last year, asking for "more nickel". "if you mine nickel efficiently in an environmentally friendly way, Tesla will give you a long-term contract," he said. " In January this year, in an interview with foreign media, Musk also said that "nickel is our biggest bottleneck" for the development of Tesla's battery.

In fact, Tesla opened the "road to cobalt" after being stuck in the neck by cobalt. Musk began to bet on nickel because he thought it was a promising and reliable metal that could increase production in the battery industry. Unexpectedly, "Nickel Nickel Rebirth" still can not help Tesla achieve his long-term goal, and the lack of upstream raw material production still restricts the company's sales target.

Data show that by 2030, about 20% of Tesla's new car will use lithium iron phosphate batteries, Tesla will use an average of 45 kg of nickel ore per car. If Tesla switches to nickel-cobalt-manganese-aluminum quaternary batteries in the Chinese market as planned, its use of nickel will increase slightly, while the use of cobalt will decline slightly.

If, as Mr Musk had previously announced on Twitter, Tesla would increase annual production to 20 million vehicles by 2030, these batteries would require more than 30 per cent of global nickel production in 2019. It should be noted, however, that total global nickel production in 2020 was 20% lower than in 2019.

Analysts say that at this scale, Tesla has only one way to ensure nickel supply, and that is to acquire the world's top six nickel suppliers, namely, Russia's Noni (Norilsk), Brazil's Vale (Vale), China's Jinchuan Group, Japan's Sumitomo (Sumitomo), Glencore (Glencore) and BHP Billiton (BHP).

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