Tesla Will Source Battery Materials from North America

April 21, 2014



Tesla Motors Inc. (TSLA), the electric vehicle maker co-founded by Elon Musk, plans to use only raw materials sourced in North America for its proposed $5 billion U.S. battery factory.

The Silicon Valley company won’t look overseas for the graphite, cobalt and other materials needed for its so-called Gigafactory, said Liz Jarvis-Shean, a spokeswoman.

“It will enable us to establish a supply chain that is local and focused on minimizing environmental impact while significantly reducing battery cost,” she said in an e-mail.

The move comes amid heightened interest in curbing graphite pollution and a widespread corporate sensitivity about avoiding the use of industrial minerals from global trouble spots such as central AfricaChina’s government, for example, has begun to shutter mines producing graphite, a major ingredient in lithium-ion batteries, over air-quality issues,Bloomberg News reported March 14.

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.

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.

Tesla’s plan will cut the per-kilowatt hour cost of its batteries by more than 30 percent and reduce “logistics waste,” Jarvis-Shean said.


8 Responses to “Tesla Will Source Battery Materials from North America”

  1. dumboldguy Says:

    Cynicism time. Since the Canadians don’t seem to mind tar sands extraction, maybe they will welcome graphite mines as well, especially if they can be located where the dust from processing blows somewhere else. Since the graphite deposits seem to be located in northern Ontario and Quebec, maybe the dust can join the soot from wildfires and help make more “dark snow” in Greenland.? And MN and ID surely can afford to sacrifice some areas to cobalt mining. Let’s just dig up the whole country and turn it into a sacrifice zone. It’s a sad commentary that even “good” things like Tesla’s batteries may have “bad” impacts.

  2. MorinMoss Says:

    I would advise Elon et al to not be too strident about the message about where their raw materials will be obtained.
    In the end, price does matter and the big players, Nissan, GM, BMW etc. are not going to let Tesla define what electric motoring in the 21st century is all about.

    With the goal of 500,000 cars/yr by 2020, compromises will very likely have to be made and the opponents & detractors will pounce on every glitch, backtrack and setback since being from-the-ground-up-American-job-creating doesn’t matter much when your message smacks of greenie-weenie and anti-petroleum.

    That said, I applaud the intent of the Gigafactory (see linked PDF below) which is not only to double current battery production by 2020 but to use wind & solar to power, as much as possible, to power its operation.

    I assume that includes the initial charging for the manufactured cells.

    Question: do rechargeable batteries have to be fully charged during manufacture?

    Click to access gigafactory.pdf

    Page 4 of the PDF shows TX, NM, AZ & NV as the preferred locations for the Gigafactory. Why not OK, UT, CO, KS or CA itself?

  3. redskylite Says:

    Looks like a good market expansion move by Tesla:

    “We’ve expected it for some time, but now it’s been confirmed: Tesla will build electric cars in China in the next three to four years.

    While Chinese production won’t replace the company’s facilities in the U.S, it will give Tesla a foothold in an ever-growing market–and help it avoid China’s hefty 25 percent import tariff.

    According to Bloomberg, Tesla’s plans also include building a network of battery charging stations in the country–both Tesla’s dedicated Supercharger stations and others too.”


    • redskylite Says:

      Tesla Motors Announcement 27/4/2014:

      China is charged! This week we switched on our first Superchargers in China.

  4. […] 2014/04/21: PSinclair: Tesla Will Source Battery Materials from North America […]

  5. I guess Peter will pick up on this story. Fantastic press release title – Elon Musk must be a gamer like me! 🙂


    • MorinMoss Says:

      I posted it on the daily roundup page on GreenCarReports yesterday ahead of their own posting.

      Here’s what the Wall of Patents looked like prior to it being taken down – my count is 144 total but I haven’t yet reviewed the list to see which are substantial and which trivial.

      The Tesla Patent Wall at HQ, now set free

      I would like to see the Tesla Supercharger become more popular as it has advantages over the competition.

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