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Tesla to Use North American Material Amid Pollution Worry

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This is a must read article. I have cut and pasted the following paragraphs directly from the article. Here is the link to the full story/https://www.bloomberg.com/news/2014-03-28/tesla-to-use-north-american-material-am
id-pollution-worry.html

Tesla “is a high-profile company that is entering an age of supply-chain transparency,” said Simon Moores, an analyst at Industrial Minerals Data in London.

Tesla, which manufactures the $71,070 Model S, says the “vast majority” of the graphite it uses right now comes from Japan and Europe and is synthetic, not mined. The Palo Alto, California-based company prefers the synthetic variety, Jarvis-Shean said.

High Costs?

Natural graphite mined in China accounts for most of the material used in batteries worldwide, according to Industrial Minerals Data. China, the biggest graphite producer, is closing dozens of mines and processing plants even as global demand soars.

The Tesla purchasing strategy is unique in the battery industry, according to Sam Jaffe, an analyst at Navigant Research. To make it work, analysts who follow the industry say Tesla may need to turn to graphite mines in Canada that have yet to be built. For cobalt, they say Tesla may have to go beyond existing Canadian output and look at prospective supplies in Minnesota and Idaho.

“It’s very patriotic of them to do that, but it costs, and already the costs of these electric vehicles are quite high,” said Edward R. Anderson, chief executive officer of Tucson, Arizona-based TRU Group Inc., a consultant.