Tesla Gigafactory to Use Materials Sourced in North America

Tesla Motors Inc. plans to build a 10 million square feet factory, in order to manufacture its own battery packs. The Palo Alto-based company intends to stop importing raw materials from overseas by opening its own graphite and cobalt mines in the U.S. and Canada. Mining activity poses great environmental threats and those new mines will require extra money on top of the $5 billion the Sillicon Valley electric vehicle maker will invest through 2020 in its Gigafactory. Sites in Nevada, New Mexico and Texas are currently under evaluation for this gargantuan facility.
Tesla Model S 1 photo
Photo: Tesla
Despite a surge in demand for graphite, the world's biggest producer - China - is reportedly shutting down more than 50 mines. The cause? Most of these facilities have been blamed for violating environmental regulations, causing a type of pollution known as "graphite rain". Although environmental regulations in China are rarely enforced by authorities, Chinese activists are lobbying for shutting the mines down. That says something about the hazards graphite mining implies.

However, Sam Jaffe, an analyst at Navigant Research, declared for Bloomberg that producing graphite in North America would be a much cleaner process than in China. By producing their graphite in the U.S., Tesla hopes to cut the per-kilowatt hour cost of its battery packs manufacturing process by a considerable percentage.

The lithium-ion batteries powering the manufacturer's electric vehicles are also made from cobalt. Although more that half of the world's cobalt is coming from the war-ravaged Democratic Republic of Congo, Tesla is getting this mineral from the Phillipines. The funny thing is that the car maker says it wants to mine cobalt in North America in order to eliminate the use of materials gathered from war zones. Something doesn't up add here, doesn't it? It surely is another cost-cutting strategy.

Although North America hasn't mined cobalt since 1971, Tesla has its eyes on mining the mineral from Idaho, where a cobalt mine is currently under development. The company that owns the yet-to-be-built mine needs to raise a whopping $120 million to complete the facility. It's hard to fathom how a small company like Tesla will be able to find an extra $120 million in order to buy that mine.

Tesla spokeswoman Liz Jarvis-Shean told the aforementioned publication that the Gigafactory project "will enable us to establish a supply chain that is local and focused on minimizing environmental impact while significantly reducing battery cost." Such large scale goals are necessary if Tesla really want to produce $40,000 mass-maket EVs in the near future. If it all goes well and demand for electric cars will rise, the Gigafactory may be used to manufacture batteries for tens, maybe hundreds of thousands EVs yearly. The factory is scheduled to begin production by 2017.

Only time will tell if mining graphite and cobalt in the U.S. will have a negative effect on the environment, or if electric cars demand will not rise as expected by Tesla. Care to tell us what's your view on this subject?
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About the author: Mircea Panait
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After a 1:43 scale model of a Ferrari 250 GTO sparked Mircea's interest for cars when he was a kid, an early internship at Top Gear sealed his career path. He's most interested in muscle cars and American trucks, but he takes a passing interest in quirky kei cars as well.
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