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Nickel Deficits Worrying Tesla and EV Battery Makers

[Arduous]

Metal News - Published on Wed, 07 Aug 2019

Image Source: auto.economictimes.indiatimes.com

Bloombergreported that battery producers and electric automakers, including Tesla Inc are concerned over longer-term supplies of nickel, a key material in their supply chain that’s forecast to fall into deficit, according to an Australian miner that’s held recent talks with the sector. The need for the high-purity material used in batteries, known as class-one nickel, is likely to outstrip supply within five years, fueled mainly by rising consumption in the EV industry. It’s a concern shared by Tesla, according to Peter Bradford, chief executive officer of nickel producer Independence Group NL, who last week met with a member of the car producer’s battery metals supply chain team. Mr Bradford said that “They are getting ready to have the new factory in China, and are at full capacity in North America. They recognize the biggest risk from a strategic supply point of view is nickel.’’

There’s been a lack of sufficient investment in new mines for materials including nickel, a factor that could spur prices as battery sector demand builds, Tesla’s global supply manager of battery metals Sarah Maryssael, told a Washington meeting in May. Tesla didn’t immediately respond to a request for comment on its outlook for nickel and other metals.

Nickel deficit worrying Tesla and EV battery makers Demand for nickel from lithium-ion batteries is forecast to surge about 16 times to 1.8 million tons of contained metal by 2030, BNEF said in a July report. Batteries will account for more than half of demand for class one nickel by that date, shifting a market that’s currently focused on stainless steel.

Perth-based Independence last year increased nickel output from its Nova mine in Western Australia by about a quarter and is spending as much as AUD 75 million (USD 51 million) on exploration in an effort to extend the asset’s life and find new deposits.

Nickel in London has jumped more than a third in 2019 and last month touched the highest in more than a year. Future battery demand will add further pressure on prices, according to Bradford, who is awaiting delivery this month of his own Tesla Model S.