• Image Credit: Tesla Motors
  • Image Credit: Tesla Motors
  • Image Credit: Tesla Motors
  • Image Credit: Tesla Motors
  • Image Credit: Tesla Motors
  • Image Credit: Tesla Motors
  • Image Credit: Tesla Motors
It's one thing for the Big 3 to get tires and engine parts from cities along the US Rust Belt. It's another thing altogether, though, for Tesla Motors to source far more esoteric materials like graphite, cobalt and lithium from Canada and the northern US. But that's what the California-based company has in mind, and it's all in the name of environmental friendliness and cost, Bloomberg News says.

Tesla is looking to bring its raw-material sourcing to this side of the Pond by the time it opens its massive gigafactory that may produce as many as 500,000 vehicles annually, Bloomberg says, citing Tesla spokeswoman Liz Jarvis-Shean. And while the raw-material price may be higher (and driven up further with the additional demand from Tesla), those costs may be offset by the fact that there will be far less transportation and logistics involved.

"When all costs are considered, it should be cheaper to source most materials from as nearby as possible" - Tesla's Liz Jarvis-Shean

"Transportation impacts are very significant on the heaviest raw materials if they need to be moved from halfway around the world," Jarvis-Shean wrote in an e-mail to AutoblogGreen, adding that there will be additional cost savings from reduced shipping time and less transit-related working capital requirements. "In the long term, when all costs are considered, it should be cheaper to source most materials from as nearby as possible."

There are geopolitical issues as well. For instance, China is shutting down some of its graphite mines because of pollution issues, while much of the world's cobalt comes from war-torn Congo, though Tesla says it gets its cobalt from the Philippines. Most of the graphite in Tesla's Model S is of the synthetic variety from Japan and Europe.

Of course, Tesla's still trying to figure out where to put its gigafactory, and has said it will be in one of four states: Arizona, Nevada, New Mexico or Texas. The factory will cost an estimated $5 billion and may support 6,500 jobs, so state governments are already starting to campaign to be the automaker's future production home. Regardless, Jarvis-Shean estimated that the sheer economies of scale from the gigafactory will reduce battery-pack costs per kilowatt hour for the company's "mass market" model (sometimes referred to as the Model E) by 30 percent after a full year of production.


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    • 1 Second Ago
  • 5 Comments
      porosavuporo
      • 1 Year Ago
      Cobalt cathodes is exactly why the old style lithium batteries are so expensive, roughly 50% of the cell materials cost. Investing in large automotive scale production ramp up of these is crazy. There are multiple much cheaper cathode materials available, with none of the supply issues of cobalt.
        Spec
        • 1 Year Ago
        @porosavuporo
        Yeah, I'm not too keen on Tesla's use of cobalt either. Largely because of its toxicity and cost. But I guess it helps them obtain the energy density they desire so they seem to be sticking with it. They better have a good recycling program.
      brotherkenny4
      • 1 Year Ago
      Local sourcing, local production and local control will be the path of the future as transportation costs rise. Short term fluctuations in the price of energy will be erroneously used as evidence to suggest that long term energy prices won't rise, but history shows us clearly that energy prices do rise and fairly steadily and predictably. This plan also suggests that transportation cost will override the increased costs due to our environmental costs. That is in direct opposition to what the wealthy would have us believe. They have consistently claimed that the cost of improved pollution controls is too high. This flies in the face of that.
      purrpullberra
      • 1 Year Ago
      I really lie this idea. I'd like to see Tesla get involved in ownership of many of the mines/suppliers to help ward off the potential for others to try to get some raw materials for themselves. I'm not saying buy all of them outright but rather some smaller ownership stake with which Tesla can help ensure its needs are met first and completely. Maybe contracts alone could achieve the same effect. I expect the rest of the market to realize the logic of going local too. Only unscrupulous countries/companies will buy from the Congo or other ravaged locales. The other battery players may soon be looking in the same places Tesla supposedly is. But imagine Tesla buying a large % of stock of each raw material provider (through their stock maybe?) to help get a better price for the stuff AND to secure as much as they need before anyone else can buy some. I've always thought Tesla needs to think MUCH bigger than they are telling people, Maybe they are. I talked about filling up the factory with raw materials and workers and also to build the factory when I wrote that I was thinking $5 billion+ was needed. Buying these ownership stakes I'm writing about is the method buy which they could do that. It's possibly how they'll get to $150 kWh battery pack costs. And I think that is the real internal goal; it fits Tesla's history of setting big goals and still overachieving. I hope I'm right about this.