How Will Tesla's New Nickel-Rich Batteries Affect Stainless Steel Prices?

Technology giant Tesla recently held its online Battery Day event, attracting in excess of 300,000 viewers. At the event, CEO Elon Musk revealed a number of battery-technology innovations it has developed and is pursuing for its all-electric vehicles.

Musk plans to accelerate the path to sustainable transport by working on high-energy cells that contain much less cobalt, replacing it with nickel instead. He detailed new cathode and anode technologies currently in development, along with new developments in materials science, manufacturing improvements  and in-house mining operations. Taken together, these developments should allow Tesla to manufacture an autonomous electric vehicle that would be available to consumers at around the $25,000 price point (approximately £19,300).

When asked if Tesla would make three different cathodes or if its diversified approach relied on partners such as LG Chem and Panasonic to supply other, less dense cells, Musk replied:  “We’re only doing high energy nickel ourselves, at least for now. Also, maybe the presentation wasn’t clear that we’ve actually had our cells in packs driving cars for several months. Prototypes are trivial, volume production is hard.”

Nickel is hugely important to the stainless steel industry, making up between 8-10% of all stainless steel. The industry is concerned about how Tesla's recent call for miners to dig more nickel will affect prices as demand is expected to skyrocket from the battery sector as people shift to electric vehicles. Musk is also reportedly in talks with Giga Metals in Canada, with the aim of establishing an envi­ron­men­tally-friendly nickel mine in British Columbia.

As the primary market for stainless steel picks up, especially in China, price is one of the major reasons that Tesla may be looking at its own nickel supplies. The price for nickel is continuing to rise, a trend that has been forecast to continue further by Morgan Stanley.

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