maybe I was wrong and Tesla hasn't secured GRAPHITE According to a Bloomberg report earlier this year, $12.2 trillion will be invested in global power generation in the next 25 years, with renewables counting for 2/3s of the investment. Tesla (NYSE: TSLA), as witnessed by its multi-billion dollar gigafactory, is the first to strike.
Tesla CEO Elon Musk’s goal is to be building 500,000 electric-vehicles (EV) by 2020. With this planned production rate in the latter half of the decade, Tesla alone will require today’s entire worldwide production of lithium-ion batteries. There are two primary raw materials necessary to build lithium-ion batteries; lithium and graphite. In fact, it is estimated that 15 times more graphite than lithium is required in a lithium-ion battery.
In a clear indication that Tesla has begun sourcing the raw materials needed for its Nevada gigafactory, last week Tesla signed a 5-year lithium supply agreement with Vancouver based Pure Energy. This puts Tesla well on its way to meeting its lithium supply needs, however, the company still faces the task of securing its graphite needs for the gigafactory.
Tesla can acquire this through the supply of synthetic graphite, which is very expensive (up to $20,000 per tonne) and requires fossil fuels to manufacture. Both of which go against Tesla’s announced mandate to reduce the cost of battery production and move away from reliance on hydrocarbons.
Alternatively, they can secure off-take from a high quality, graphite deposit, much like they did with the Pure Energy lithium deposit (which would be aligned with their corporate mandate). Become vertically integrated; own your raw material; guarantee quality control and secure your future supply. Given the substantial concerns surrounding Chinese graphite mines (world’s largest graphite producer) it is quite likely that Tesla will seek a North American (possibly even American) source for its graphite.
*** Now if I was spending billions on a new plant and had the whole world watching my every move. I would have all ofmy key ingrediants and resources secured and close to home. That would be a requirement to ensure success out of the gate. Then as my plant gained efficiency and economy of scale I would introduce alternate (lower priced) raw materials. ***
Now there is only one source of graphite in the lower 48 ---- us