Tesla's plans to build more batteries align with the growing EV market, but may face challenges related to the battery supply chain and environmental considerations. Green Battery Minerals has a very unique solution.
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Carmakers and electric vehicle battery manufacturers have collectively invested and promised to invest close to $100 billion in building domestic cell and module manufacturing, TechCrunch reports. Together, these companies promise to deliver an annual capacity of over 1,200 gigawatt-hours before 2030, if each factory reaches maximum capacity.
That's a lot of batteries, but do you know how many more graphite minues does the industry needs to have enough graphite to power roughly 18 million electric vehicles with this $100 billion investment?
These numbers are based on previous Tesla predictions that say about 100 GWh capacity can power around 1.5 million electric vehicles. Tesla's success in battery production to a large extend depends on the availability of high-quality materials and investment opportunitites.
So the EV industry is investing $100 billion in building US battery cell manufacutinrg. Canada is investing about $30 billion in cell and module manufacturing for Stellantis and Volkswagen.
Meeting the Graphite Demand: A New Opportunity in the Battery Industry
There needs to be 97 more graphite mines built to meet demand. These plants can be built in 3 to 4 years. Mine on average takes 7 years.
As I move forward with this story, please keep in mind that on a total component basis for an EV battery, graphite is about 25% to 28% of the whole thing (Autoweek). It's by far the largest component by volume and mass in the battery.
Toyota was right, when Akio Toyoda was saying that the current grid and the resources can't handle it if the industry turns to EV-only overnight. The world's insatiable hunger for batteries, driven by the electric vehicle revolution and the growing demand for renewable energy storage solutions, has sparked a race to secure essential raw materials. At the forefront of this race is graphite, a critical component of lithium-ion batteries, the lifeblood of our modern, eco-conscious society. Surprisingly, this critical mineral faces a significant shortage, with the need for 97 more graphite mines to be built just to meet the projected demand.
The challenge is clear: we need more graphite, and we need it fast.
Thankfully, the timeline for building graphite processing plants is relatively short, with the capability to construct them within three to four years. However, the bottleneck lies in the time it takes to establish a new graphite mine, averaging a lengthy seven years.
Now the Inflationary Reduction Act (IRA) mandates that raw materials for new battery plants must originate from the USA or countries friendly to the USA, such as Canada. In fact, Elon Musk said that Tesla would work tirelessly to reach the a 1,000 GWh of battery supply in the United States, in order to satisfy the Inflation Reduction Act. This new policy by the government encourages domestic production and supports a more secure supply chain for critical minerals like graphite.
One company, Green Battery Minerals Inc., at the forefront of this domestic push is working diligently to develop its graphite mine. Currently conducting a bulk sample of 27 tonnes, they aim to play a crucial role in reducing the graphite shortage. What sets this company apart is its commitment to environmentally responsible practices.
Traditionally, extracting graphite from ore involves a process known as flotation, which relies heavily on water and carries a substantial environmental and carbon footprint. However, Green Battery Minerals has adopted an innovative approach using air separation, significantly reducing the ecological impact of their operations. This move not only contributes to the sustainability of the battery industry but also aligns with the growing trend of environmental, social, and governance (ESG) considerations.
To put it simply, Green Battery Minerals found something very valuable. On the surface they discovered graphite. So far they have 550,000 tons of contained graphite as per their 43101 report in June 2019. They have 12 zones so far and their resource of 550,000 contained tons of graphite only comes from zone 1 of which they have only drilled 20%.
This is in Quebec, Canada. This is good news for them because it means they have a lot of this valuable material. They are excited because there's a high demand for this material, especially for making batteries. This is actually huge news for the EV industry, but not many people talk about it.
Why is graphite so crucial in the battery industry? It all comes down to the composition of lithium-ion batteries, where, as I mentioned above, graphite plays a pivotal role. When about 28% percent of lithium-ion battery consists of graphite, you say this material is an indispensable component in the production of these energy storage devices. Given this high demand and the vital role of graphite in energy storage, it's no surprise that many graphite companies are currently undervalued in the market.
What's In It For Tesla and Other EV Makers?
Tesla's plans to build more batteries are influenced by several factors:
- Market Growth: The rapid growth of the electric vehicle (EV) market in North America, as indicated by President Biden's economic plan and increasing adoption in Canada, creates a strong demand for batteries. This is a positive sign for Tesla as it aligns with their battery production expansion plans in Canada and the USA.
- Battery Supply Chain: Tesla's battery production relies on raw materials, such as graphite. The need for more graphite mines and the requirement for raw materials to come from the USA or friendly countries could impact Tesla's battery production costs and supply chain logistics.
- Environmental Impact: There are environmental concerns related to traditional graphite extraction methods. Tesla's focus on sustainability and reducing the carbon footprint of EVs may lead them to consider alternative methods like air separation, as used by Green Battery Minerals, to source materials more responsibly.
- Battery Quality: The percentage of graphite in lithium-ion batteries is significant, and higher-grade graphite can potentially improve battery performance. Tesla's ability to access high-quality graphite could be advantageous for their battery production.
- Investment Opportunities: Many graphite companies are reportedly undervalued, making them a favorable target for investment. Tesla's expansion plans could attract investors looking to capitalize on the growing EV market and associated industries.
The demand for graphite in the battery industry is surging, and the race to secure this critical mineral is well underway. With a more favorable regulatory environment, innovative and sustainable extraction methods, and promising projects on the horizon, the graphite sector offers an attractive investment opportunity. As we work towards bridging the graphite supply-demand gap, it's clear that the future of batteries and clean energy hinges on the success of ventures like ours, committed to responsible and efficient graphite production.
In simple words, Tesla wants to make more batteries for electric cars because more people are buying them. But there could be problems with getting all the materials for the batteries and making sure it's good for the environment. Plus, they need enough money to do it. These things can affect whether Tesla does well in making batteries. This is why they should look into companies that mine graphite using innovative ways to get better results.
Armen Hareyan is the founder and the Editor in Chief of Torque News. He founded TorqueNews.com in 2010, which since then has been publishing expert news and analysis about the automotive industry. He can be reached at Torque News Twitter, Facebok, Linkedin and Youtube. He has more than a decade-long expertise in the automotive industry with special interest in Tesla and electric vehicles.
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