Tesla avoiding nickel crisis with 'secret deals' with Vale and other suppliers, report says

A new report says Tesla is avoiding the current nickel crisis through “secret deals” with suppliers including Vale.

The price of nickel has more than doubled in the past 12 months.

Nickel is an important resource when it comes to transitioning the world to electric transport and clean energy.

High-energy-density batteries, which are essential for long-distance electric vehicles, use a significant amount of nickel at the cathode of all battery cells.

In terms of volume and cost, it is an important part of an electric vehicle’s battery pack, which in turn is the most expensive part of an EV.

Of course, nickel is also used for applications other than batteries for electric vehicles.

Indeed, only about 5% of the world’s nickel supply is currently used for the batteries that go into electric vehicles, but that number is growing rapidly.

Despite conservative projections of electric vehicle adoption, it is expected that EV nickel demand will increase from 5% to 59% of total nickel supply within this decade.

This means that if there is no big jump in production soon, there is going to be a huge shortage in the supply of nickel.

In 2020, Tesla CEO Elon Musk urged nickel miners to ramp up production as he saw the problem coming, but things escalated quickly due to Russia’s invasion of Ukraine and subsequent sanctions on trade with Russia, which That’s the third of the world. Largest producer of nickel.

The conflict sent the price of nickel to over $40,000 a ton before settling down to $33,000:

Now Bloomberg reports that Tesla was able to avoid some of the madness through “secret deals,” including one with Vale:

This includes a multi-year supply deal with mining giant Vale SA. The agreement, not announced, involves Nickel from Canada, according to people familiar with the matter, who asked not to discuss private details.

The report didn’t provide any specifics about the deal, and it’s not clear what’s “secret” surrounding it. Vale was already known as Tesla’s main nickel supplier.

The company recently struck a great deal to secure a supply of nickel from New Caledonia from a mine operated by Vale.

Tesla is looking to get more nickel from North American sources through deals with upcoming mines such as Talon Metals, which is looking to build a nickel mine in Minnesota.

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