Tesla looking for new lithium suppliers for Model 3, Gigafactory
Tesla's supply costs could surge as lithium demand doubles by 2020.
The California-based company may be in the process of broadening the supply sources needed to ramp up production of lithium-ion batteries for the Model 3. Specifically, Tesla may be taking bids from mining companies Pure Energy Minerals Limited and Bacanora Minerals Ltd., Hybrid Cars says, citing a Financial Post article. Of course, neither of these companies have ever produced lithium products, but there's a first time for everything, especially when Elon Musk is on the other line.
Meanwhile, Albemarle Corporation, SQM, and FMC Corp. are among the other companies that may produce lithium for Tesla, and for good reason. With more automakers jumping into the plug-in vehicle fray and Tesla boosting production, global demand for lithium may almost double by the end of the decade, the Financial Post says, citing Albemarle CEO Luke Kissam. Lithium prices already surged late last year.
Such potential supplier relationships indicate that Tesla is looking to hedge its bets in case lithium-ion battery maker and partner Panasonic can't make good on meeting demand. Panasonic, which first struck a deal to make batteries at the Gigafactory in the summer of 2014 and has been working with Tesla since the Roadster days, said last year that it would invest about a half-billion dollars into Tesla's $5 billion Gigafactory and supplied a few hundred workers during the early days of the factory build-out last year.
Bacanora Minerals was cited by the Wall Street Journal last summer as being on tap to produce lithium for the Tesla factory.
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