Tesla's Gigafactory in Nevada would suffer from shortages of lithium in the upcoming times
Tesla Motors might suffer from a shortage of raw material in the upcoming times. On the Nevada desert’s edge, the electric vehicle manufacturer is establishing the biggest battery factory. The mile long, so-called Gigafactory would probably increase demand for lithium, the components utilized in power storage devices that electrify most powered vehicles.
But the California based corporation is still to proclaim any lithium supply contracts with large producers, raising a question that where it would procure the lightweight material it would require to initiate the production of electric storage gadgets it could reduce its costs per kwh by more than 30%, significant for the mass auto market uptake of electrified automobiles.
But that would need safe, long lasting supplies of lithium more than 70% of those are found in Bolivia, Argentina and Chile. Due to increase in demand for power batteries, the international lithium market is being challenged by a shortage, without any new supply being discovered in 2016, state experts. Simultaneously, battery plants being established in the People’s Republic of China would lead to an increase in the demand of lithium.
Tesla news reported that London based consultancy Benchmark Mineral Intelligence stated “Raw material availability is probably the biggest challenge facing the Gigafactory outside of the need for basic demand, It is also the only area of the electric vehicle supply chain where Tesla does not have ownership and control.”
The Corporation made efforts to purchase the Calif based lithium producer in June last year but after that it has gone into receivership, stated a person aware of the matter.
Global lithium’s founder and market expert Joe Lowry stated “The current strategy seems to be no direct investment but leveraging the Tesla name by signing ‘contingent’ contracts at unachievably low prices with junior mining companies who have never produced lithium chemicals, The most likely outcome is Tesla will pay high market prices for lithium through at least the end of the decade,”
Up till now 2 organizations have proclaimed supply agreements with the South African born entrepreneur’s organization, and none of them are anticipated to manufacture huge quantities of lithium until after 2020.
That could make the corporation suffer from shortage of lithium it requires when its plant initiates it operations- or attempting to sign supply deals when lithium hydroxide’s price is higher.
Benchmark Mineral Intelligence stated Tesla would require around 24,000 tonnes yearly of lithium hydroxide, out of the component’s market last year of 50,000 tonnes .
The founder of Tesla Elon Musk said that the corporation would try to utilize lithium produced in Nevada, where Silver Peak mine of Albemarle’s is known for being the only facility for the production of component in the largest economy.According to the most recently available information, the mine was able produce 870 tons when it Rockwood owned it 2 years ago before Albermale purchased the organization for $6.2bn in 2014.
Experts state Baton Rouge’s Albermale, Chile’s SQM and Philadelphia's FMC Lithiuum, the huge lithium producers, haven’t been ready to sell the components for the prices the organization has demanded.
“Tesla is not the biggest piece of the pie,” one of the smaller producers states. “It’s the dog that barks that doesn’t bite.”
The car maker states none of the proclaimed supply contracts is exclusive and that none of all its lithium would be from those vendors.
FMC Lithium states it is in continuous procuring deliberations with a large number of leading electric automobile manufacturers, encompassing Tesla Motors.
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