Each manufacturer has an impact on the environment, both through its production and through its products. The production of batteries for electric vehicles is often the subject of discussion, so Tesla paid special attention to this. The company is one of the few that carefully monitors the supply chain of minerals for their production.
Given the unique importance of batteries to the development of electric vehicles and energy storage, Tesla has developed a dedicated program to responsibly source three priority minerals in the battery supply chain, as shared in its 2021 Impact Report. The company said that it favors cobalt, nickel, and lithium for battery production and prioritizes these raw materials for the following reasons:
In the transition to sustainable energy, the mining industry plays an important role, which is why Tesla works directly with suppliers to ensure that mining is done in a responsible manner. This is one of the reasons the company joined the Initiative for Responsible Mining Assurance (IRMA) and uses the IRMA Standard as well as other internationally recognized responsible mining standards in its due diligence.
The unique Tesla approach: Going directly to the source
The implementation of an OECD-aligned approach for cobalt, nickel, and lithium is underpinned by the following two pillars:
Tesla has an excellent diversification strategy. The manufacturer's batteries today contain a variety of different cathode chemistries, including nickel-cobalt-aluminum (NCA) and nickel-cobalt-manganese (NCM) for higher energy applications, and lithium iron phosphate (LFP) for lower energy applications. Tesla will continue to advance a diversified cathode strategy for LFP, nickel-rich and manganese-rich cathodes to address various market segments for vehicle and energy storage products, and provide future flexibility based on raw materials availability and pricing. To put this into context, lithium only accounts for roughly 1.5% of the full battery pack weight. Additionally, iron phosphate battery packs contain no cobalt or nickel.
The relative composition of cathodes and the company's overall demand for various minerals and battery chemicals will continue to evolve. At the same time, Tesla and the global battery supply chain will require significant amounts of responsibly produced lithium, nickel, cobalt, manganese, iron, phosphates, and many other minerals for the foreseeable future. The manufacturer understands that battery recycling will play a critical role in supplying some of these materials to enable a closed supply chain, but global cell production will continue to be heavily dependent on primary mined materials to meet growing demand in the short to medium term. The availability and affordability of these minerals and chemicals are key to advancing Tesla's mission and accelerating the transition to sustainable energy. The company said it will continue to work with its suppliers and upstream manufacturers to scale up key battery minerals.
For cells containing NCA and NCM cathodes, Tesla continues to work on batteries with higher nickel content to increase vehicle range while lowering overall battery costs without compromising overall cell performance, such as safety and battery life, which is currently being provided by cobalt. The company notes that it expects its absolute cobalt demand to increase in the coming years as vehicle and battery production growth is projected to outpace the overall cobalt reduction per battery.
© 2022, Eva Fox | Tesmanian. All rights reserved.
We appreciate your readership! Please share your thoughts in the comment section below.