Tesla To Use All North American Resources For Planned Gigafactory

MAR 31 2014 BY STATIK 17

Tesla's Gigafactory Will DOUBLE The World's Production Of Lithium Ion Units

Tesla’s Gigafactory Will DOUBLE The World’s Production Of Lithium Ion Units

When Tesla announced that it would be building a $5 billion dollar facility in conjunction with other battery manufacturers as a partners, one of the first question was – where will Tesla source its raw materials?

Would the graphite, cobalt and lithium come from places like South America, China, the Congo?  Or perhaps even some resources from the USA?

Nevada Is Currently Projected As The Front-Runner For Tesla's Battery Facility

Nevada Is Currently Projected As The Front-Runner For Tesla’s Battery Facility

It turns out Tesla is going to stay at home and source everything from North America, and the reason isn’t cost (as it is quite likely more expensive to acquire resources abroad), but rather the environment.

“It will enable us to establish a supply chain that is local and focused on minimizing environmental impact while significantly reducing battery cost,” Tesla spokesperson Liz Jarvis-Shean said in a statement to Bloomberg.

The topic “du jour” of late has been graphite mining around the world, a process which, if not done properly, puts out massive amount of pollution; so much so that countries like China are now actively shuttering many of their mines.

Tesla’s answer at this moment in acquiring graphite for their lithium batteries is to source the material in its synthetic variant from Japan and Europe.

Bloomberg talked to Sam Jaffe, an analyst at Navigant Research, and he predicts that the graphite for Tesla’s Gigafactory will most likely come from planned operations in Canada.  If more is required than Canada can supply, resources in Idaho and Minnesota could also be tapped.

Tesla's "Gigafactory" Timeline

Tesla’s “Gigafactory” Timeline

As for cobalt, Tesla currently acquires it from Sumitomo Metal Mining, who has a cobalt mine based in the Philippines.

While the US still has reserves of cobalt, none has been mined for more than 40 years.  Bloomberg points to companies like Formation Metals in Idaho who are looking to supply “ethically sourced” cobalt to Tesla upon completion of a $120 million dollar project.

Currently, more than half of the worldwide cobalt supply comes via the Congo; a place where no one is particularly pleased to deal with.  Canada mines about 6% of the world’s supply of this material today.

While locally sourced materials will be received with much praise by the more patriotic and environmentally-friendly among us, it will also add to the cost of future lithium cells from the plant.  However Ms. Jarvis-Shean says that these costs have been figured into the 30% cost reduction the company expects to see by building the cells themselves, will reducing “logistics waste”.

Bloomberg

Categories: Battery Tech, Tesla

Tags: ,

Leave a Reply

17 Comments on "Tesla To Use All North American Resources For Planned Gigafactory"

avatar
newest oldest most voted
Anthony
Guest

So this is why my Western Lithium stock is up this morning!

Good to see that all the materials will be sourced in NA – more jobs, plus it will make it easier for Tesla and other battery manufacturers to build more factories here in the US.

GeorgeS
Guest
GeorgeS

Yeh and with Idaho and Canada as suppliers, which state is closest?

Not Texas.

Dr. Kenneth Noisewater
Guest
Dr. Kenneth Noisewater

Yep, TX is a long shot even _with_ a successful special-session law allowing them to sell vehicles there. Without it? It’s a none shot.

Ocean Railroader
Guest
Ocean Railroader

It sounds like Elon Musk has for sight into what could happen in that a lot of these counties were these elements come from are sort of shaky or prone to hiss fits. Such as if some of these places has a mood swing or wakes up one morning in a bad mood they could shut off of the supply of some of these minerals. And if they close of say the supply of one of these minerals for political reasons they could shut down the whole Giga Factory.

Anon
Guest
Anon

+1

NA politics might not be pro-direct sales, but they are more receptive to providing stable sources of supplies for manufacturing needs…

Warren
Guest
Warren

I commend Elon for showing us all just how preposterous cars are.

Nature defines what is sustainable. We are all driving the equivalent of elephants that run like cheetahs.

Warren
Guest
Warren

Instead of “growing” butterflies or trees on dash displays, they should “grow” earthmovers.

Jouni Valkonen
Guest
Jouni Valkonen

Warren, electric cars are greenwashing personal transportation. I can imagine a world where we have 9 billion people and on average one electric car per family. This is perfectly sustainable, because electric cars are going forward using solar power. And all resources that are used for manufacturing cars, can be recycled.

Warren
Guest
Warren

You do realize that you are imagining doubling, or tripling the number of cars on the planet? The earthmovers and ships to mine and move all these materials will be electric, powered off PV?

Do you think there are enough rubber trees to supply tires. And with all this energy diverted to all the extra cars, where will the energy to feed the extra billions come from?

http://physics.ucsd.edu/do-the-math/post-index/

http://www.withouthotair.com/Contents.html

ClarksonCote
Guest

The focus isn’t cost? Their own quote says, “while significantly reducing cost” I guarantee if it was more expensive the environmental concern would go out the window (sad as that is)

I am glad to hear there will be local sourcing though.

DeeAgeaux
Guest
DeeAgeaux

I guarantee it would not.

It would kill the primary reason a majority of Tesla buyers buy Model S, why they have so many allies in state legislatures, and a large source of investment capital not available to other automotive OEMs.

If they threw environmental standards out Tesla could produce the batteries cheaper in China. Then Tesla’s opponents would laugh and point out that Tesla is environmentally no better than the best in class ICE vehicles. Using the proposed standard and shipping cost it would be more expensive to produce in China.

ClarksonCote
Guest

Where do you think Tesla gets their batteries presently? There’s a whole host of environmental concerns that exist for raw material extraction, but people are still buying the vehicles.

People still buy smart phones and tablets and laptops too, and they’re all made overseas. I don’t know of anyone that does not own these things because of environmental concerns.

Regardless, I’m still excited to see they are working to source everything locally. It will not only have environmental benefits, but likely will have great benefits to the economy in the US and Canada.

Dan Gallagher
Guest

See: the “Story of Stuff” and “Story of Electronics” … maybe I’m a minority, but I have no pad or phone mostly because of the issues brought up in these documentaries.

I’d have no EV, but after trying for some years (and succeeding to some extent) to bicycle, I realized without a public transport option (like many people), it just wasn’t feasible to exist in my current environment without a car (this past winter was particularly bad).

I think the sex-appeal of a product like the Model S and the rock-star persona of Musk is hard to counter … but a big heavy car is a really inefficient way to move a person. Trains, buses, and bikes are the future. Tesla might just be a stepping stone to get there from our current car-culture obsession.

ClarksonCote
Guest

Hi Dan,

I think there are people that, like yourself, keep an eye on these things.

However, from a business perspective, it’s about money, and for the majority of consumers, it’s also about money too.

If the price point for Tesla batteries rose 25% as a result of this decision, they would ultimately lose many sales, and they would rethink this course of action.

There’s numerous studies that back this, and the majority of “environmentally friendly” companies are only so to the point that it doesn’t affect their bank account.

It’s clear in the Tesla quote above that they plan to save a lot of money by going this route. If it’s environmentally friendly too, then all the better.

Spec9
Guest
Spec9

I kind of doubt this is true but I’ll be amazed and incredibly impressed if it is true.

And if it is true, it will kill a standard hater talking point of “Uh, you are just trading addiction of mid-east oil for addiction to Chinese batteries”.

Steven
Guest
Steven

It would be nice to see some sort of recycling facility at the Giga-Factory… Used batteries in the front door, batteries made from recycled materials out the backdoor. That would be one way to minimize impact.

The major problem there, would be the logistics of getting the used batteries there.

Arthur
Guest
Arthur

Used batteries will have a second life as grid storage and battery backup for PV systems. Only after their capacity is much degraded will they need to be recycled. That will happen in due time.