A Tesla S battery contains some 7 kgs of Cobalt and about 35 kg of nickel.
http://www.theenergycollective.com/davidhone/2399740/the-cobalt-rush
The world produced about 60 GWh of lithium-ion batteries in 2015 and the manufacturers of those batteries used 38,300 tonnes of cobalt. By 2020, global battery manufacturing capacity should exceed 140 GWh and could be significantly greater. If forecasts about near-term growth in the EV sector are even close to accurate, demand from the battery industry will soar in the next few years. Ultimately, I don't see how an industry like battery manufacturing that needs massive quantities of cobalt for low-value products will be able to compete with industries that need modest quantities of cobalt for high value products.
The bottom line in my view is that the substantial bulk of future increases in non-Chinese cobalt supplies will flow to the battery industry but future declines in non-Chinese cobalt supplies will come directly out of the battery industry's hide. I also believe automotive applications will be last in line for any cobalt supplies that are available for battery production because companies that make smartphones, tablets, portable computers and power-tools and only need a little battery power per unit of production are far less cost sensitive than auto makers that need massive amounts of battery power per unit of production.
Conclusion
Tesla Motors (NASDAQ:TSLA) cannot launch a $35,000 Model 3 without a Gigafactory that's operating at or near its design capacity of 35 GWh per year. That will require from 4,000 to 8,000 tonnes of cobalt per year, or 10% to 20% of non-Chinese refined cobalt production. Since all of the non-Chinese cobalt production is currently going to other industrial users that are better positioned to pay a premium price for raw materials, I have no earthly idea where Tesla believes it can develop a robust and reliable supply chain for the Gigafactory.
The bottom line for investors is "It doesn't matter how big your Gigafactory is if you don't have a rock-solid supply chain for your essential raw materials."
http://seekingalpha.com/article/4030212-deeper-dive-teslas-evolving-cobalt-nightmare
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