In order to prevent future material shortages, Tesla will buy the key metal from the lithium-ion battery from Glencore of Switzerland, the world’s largest producer of cobalt, sources said, according to anonymous sources. Once the contract is signed, Tesla will be able to stock up on large amounts of cobalt at new plants in China and Germany.
This year’s completion and commissioning of Shanghai’s super plant has greatly boosted Tesla’s production capacity, with multiple rounds of price cuts and new energy subsidies, and they are sitting on top of China’s new energy market. With a red-hot performance, Musk’s company has overtaken Toyota in market capitalization. Clearly, investors believe Iron Man can lead Tesla to become a globally influential supercar giant.
Although the global cobalt raw materials are not yet in short supply, but with volkswagen, BMW and other traditional manufacturers to join the electric battle, Musk is also worried about the future expansion of the road to “no rice pot.” In 2017, warnings of a chronic shortage of cobalt raw materials began driving their crazy price increases, and in order to reduce dependence, Tesla began investing heavily in developing cobalt-free batteries. However, the transformation of new technologies will take time, and cobalt raw materials will remain a must-have resource for electric car companies to expand.
Tesla’s contract is understood to have brought Glencore an order of 6,000 tons of cobalt raw material per year. In fact, executives from both companies began talking about the terms of their contracts in January, when Glencore’s main destination for cobalt ingredients was the Shanghai Super factory. The Financial Times also reported earlier that Tesla’s new plant would use Glencore cobalt.
Glencore declined to comment on news of the tie-up, and Tesla did not respond.
Glencore’s most recent order is also a soft one, with Tesla signing a four-year contract with Samsung in February, and the South Korean giant buying 21,000 tons of cobalt. Last year, Glencore also partnered with SK Innovation to supply 30,000 tons of cobalt to each other within a few years. In addition, GEM Co in Shenzhen, China, has ordered at least 61,200 tons of cobalt from Glencore. BMW buys cobalt ingredients directly from Glencore’s Australian mines.
Earlier this year, Kwasi Ampofo, an energy economics analyst at Bloomberg, noted that the Shanghai superplant’s weekly production capacity will reach 1,200 tons a year, given its weekly capacity of 3,000 units. As for the Berlin Super Communist, which is under construction, the annual design production has reached 500,000 units. In addition to Panasonic, Tesla has also found LG and Ningde era responsible for the production of power batteries.
While Glencore may seem to have an inexhaustible order, it is not easy to guarantee that cobalt raw materials will be delivered to customers on time. Glencore lost money last year and has had to spend a lot of time pulling in new contracts as the price of cobalt raw materials collapses in the second half of 2018 and many customers choose to refuse to honour their contracts. In November last year, Glencore also shut down a large cobalt mine in Congo for maintenance, a process that will last two years.
In the automotive industry, it’s rare to sign contracts directly with miners. In the inevitable context of the electric tide, it is clear that everyone is afraid of the future because of cobalt raw materials are stuck neck.
Right now, three-quarters of the world’s cobalt raw material comes from Congo (DRC), and it’s a sweatshop all over the place to make money. In order to improve this situation, the Democratic Republic of the Congo is putting more pressure on the supply chain, such as the centralized management of the export of cobalt raw materials.
For electric vehicles, batteries are at the heart of the core. For Tesla, a battery with super-powered battery is also a core competitive. Yesterday, Musk proudly announced that the Model S 2020 model will become the world’s first MODEL to break 400 miles with a range of 400 miles, nearly 20 percent more than the previous model, and truly solve the user’s mileage anxiety problem (the Tesla SEXY series of four models in the EPA list occupies the top four).