It All Comes Down to Batteries for Tesla

When it comes to Tesla's growth and success, it all comes down to batteries. Are there enough minerals to make the batteries Tesla needs?

Tesla and Batteries

When you look forward over the next decade, Tesla has one challenge it needs to overcome - and that is getting enough batteries to power the millions of vehicles it will produce and to power the hundreds of thousands of Megapacks and PowerWalls it will produce as well.

We need to hear from Tesla on Investor Day, how they are going to get sufficient battery materials - whether it's Lithium, Nickel, Graphite, Manganese, Copper, Sodium, or anything else. All these materials are in the Earth's crust and need to be extracted and refined. There are a lot of people saying the minerals just aren't there or can't be processed fast enough. How will Tesla solve this challenge?

The world is moving toward an electric future with solar, battery storage, and EVs. If this transition is going to accelerate, battery materials must be extracted a lot faster than they are right now. Elon Musk is positive about the future of Tesla and believes it is doable.

The Image From Investor Day

It appears that the image for the cover of Investor Day is a bunch of castings for the Model Y. It represents the scale of how much is needed to get there. It could be a representation of a chemical structure of what Tesla needs to do. And, it could be related to batteries or minerals. But, most likely, it's representing the castings and scale needed to mass produce the Model Y to 5 million units or more each year.

To reach the scale that Tesla envisions for the future, the world needs to get to about 20 to 30 TWh of batteries out there to be used for grid stabilization and vehicles. That is going to require extracting an enormous amount of materials from the Earth's crust. The infrastructure isn't there to do this yet, and something has to change.

Lithium - the Primary Mineral

Recharge Resources is an early stage company that is focusing on extracting Lithium from the earth. They are researching doing this from South America. They have found Lithium in their searches. Their hope is to be able to build extraction sites that can get this Lithium. Advances in Lithium extraction have improved the ability to get at Lithium. Argentina could become a top producer of Lithium globally.

Lithium is trading at around $80,000 per ton. Tesla cannot get at all the Lithium and minerals on their own. The more Lithium society gets as a whole for society, the faster the transition to sustainable Energy will be. Hopefully, this company, as well as other mining companies, can help us get there faster.

Continued Exponential Growth Is Painful

Drew Baglino talked about growing exponentially. When you are only making 5 of something, going to 10 isn't that difficult. When you get to millions of something, doubling that becomes a lot more painful. It requires major shifts in culture, manufacturing, and engineering in order to sustain the growth.

The challenge is a scale problem. If Tesla continues to grow at 50% per year, then getting to the global annual production of 15 to 20 TWh per year. The world is close to 1 TWh per year - around 700 GWh, but there's still a lot more to go.

Cars are like giant phones, and the batteries take a lot more to produce. The material for the battery has to come out of the ground. It's a lot of earth to move to get to an eventual 300 to 500 TWh for global battery production. Once the world gets to that amount of material, battery recycling takes over and extraction no longer matters as much. This is a temporary problem with scale that has to be solved.

It All Comes Down to Batteries for Tesla

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