Tesla has reached a deal with an outside supplier to get the key battery component currently only produced in China.
Tesla is striking a first-of-its-kind deal with Mozambique for a critical component in its electric car batteries. The move is seen as an attempt by Tesla to reduce its dependence on China for graphite. A mineral producer that is critical for lithium-ion batteries has partnered with an electric vehicle manufacturer.
The company plans to increase its battery production to reduce its reliance on China, which dominates the global graphite market, said Simon Moores of United Kingdom-based battery materials data and intelligence provider Benchmark Mineral Intelligence.
Tesla faces questions about its ties to China, where there are environmental concerns at some mines. By producing the batteries in the U.S., Moore said Tesla would reduce some of those questions. The battery industry has been forced to confront a short supply of graphite in recent months, Moores said.
A battery stores lithium graphite until it is needed to generate electricity by splitting it into ions and electrons. Tesla is making almost a million electric cars per year, but sourcing enough batteries is its biggest constraint.
“They can’t get enough batteries,” Moores said, “despite upping their battery manufacturing capacity.”
The company’s new battery factory in its Austin, Texas, hometown will help it become more self-sufficient. Still, Moores said the company would continue to buy batteries from other manufacturers for at least this decade.
At Tesla’s battery factory near Reno, Nevada, Panasonic deals with the automaker to make battery cells.
