Tesla chief executive Elon Musk has declared nickel supply as a major concern for the company’s battery production, which could impact future deals with Australian nickel miners.
Last year, BHP Nickel West asset president Edward Haegel mentioned the possibility of Tesla using BHP’s nickel supply, which 70 per cent of is already used to develop batteries around the world.
Nickel is a vital component of lithium-ion batteries that reduces the need for cobalt, but Musk indicated there was more iron to use for its cathodes than nickel.
“Nickel is our biggest concern for scaling lithium-ion cell production. That’s why we are shifting standard range cars to an iron cathode. Plenty of iron (and lithium)!” Musk tweeted on Friday.
A recent report from Roskill suggested that nickel would enter a deficit in the coming years, where refined metals would outweigh mined production.
The nickel price has enjoyed high prices, trading for $US19,689 ($25,348) on the London Metal Exchange last week, which is its highest result since September 2014.
Tesla uses lithium-ion batteries for its vehicles, which uses mined lithium and nickel raw materials that are converted into a metal sulphate.
This turns into cathodes with the addition of chemicals and water.
In July last year, Musk said that a “giant contract for a long period of time” would be provided to a miner capable sustainably extracting nickel due to the high cost of EV batteries.
By September, Tesla manufacturing industry executive Drew Baglino said the company intended to mine its own battery metals.
“We’re going to go and start building our own cathode facility in North America, leveraging all of the North American resources that exist for nickel and lithium,” Baglino said.
“Just doing that and localising our cathode supply chain and production we can reduce the miles travelled by all of the materials that end up in the cathode by 80 per cent, which is huge for cost.”