Tesla boss Elon Musk had bad news for cobalt producers this week in a letter to shareholders and comments made to analysts.
The electric car maker is the world’s highest profile promoter of battery metals such as cobalt, lithium and nickel — which are in high demand for batteries needed to power the next generation of cars.
In a letter to shareholders that would have sent shivers down the spines of cobalt investors, Tesla said it had slashed its reliance on cobalt for its new Model 3 electric car model — while raising nickel content.
Here’s what the letter said:
“The Model 3 battery has sophisticated power electronics, cooling systems and structure that enables high level of safety, sports-car like acceleration, Supercharging, a 120,000 mile warranty and low cost.
“Cells used in Model 3 are the highest energy density cells used in any electric vehicle.
“We have achieved this by significantly reducing cobalt content per battery pack while increasing nickel content and still maintaining superior thermal stability.
“The cobalt content of our Nickel-Cobalt-Aluminum cathode chemistry is already lower than next-generation cathodes that will be made by other cell producers with a Nickel-Manganese-Cobalt ratio of 8:1:1.
“As a result, even with its battery, the gross weight of Model 3 is on par with its gasoline-powered counterparts.”
On a later call with analysts to discuss Tesla’s latest quarterly results yesterday, Musk went further.
The call was widely reported for Musk’s brutal dismissal of an analyst question with the quip: “Excuse me. Next. Boring bonehead questions are not cool. Next?”
But his comments about the cobalt content of batteries were more significant for ASX investors.
Here’s the transcript:
Rod Lache – Deutsche Bank Securities: Your comments in your letter on the advances in batteries were interesting. Could you give us some insight into how we can translate that into cost per kilowatt hour? Or some metric in terms of the gains that you’re making?
Deepak Ahuja – Tesla: Every data point, Rod, that we look at internally suggests that we are best-in-class, but we don’t prefer to…
Elon Musk – Tesla: We’re best, which is not a class.
Deepak Ahuja: Yes. We’re the best. Sorry.
Elon Musk: The best-in-class of one.
Jeffrey B. Straubel – Tesla: I think directionally, Rod, it’s helpful to understand the different commodities and the trends that we’re pursuing in the batteries. Being on a path to reduce cobalt usage, for instance, has been something we’ve been working on for literally several years now, and this has been extremely helpful in the overall cost per kilowatt hour, especially with recent commodity price movements. So, we can’t really be quantitative, but that directionally is a pretty good trend.
Elon Musk: Yeah, we think we can get the cobalt to almost nothing.
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