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Innovation. Disruption. That’s what Elon Musk and Tesla have become synonymous for — and for good reason. A recent claim made that Tesla would be able to reach production of 20 million vehicles per year before 2030, however, may be more of a stretch goal than a realistic number, as staff at Mining.com has recently pointed out.

Granted, when Elon Musk made the claim in September of last year, he added the caveat that the 20 million vehicles production number would require “consistently excellent execution.” It’s more than that, though — the limitations of material inputs, and, more specifically, the challenges associated with critical mineral resource supply, cannot be executed away.

In an interesting thought experiment that puts these numbers into context, using data from Adamas Intelligence, Mining.com has extrapolated just how much in raw materials Tesla would require to produce those 20 million vehicles instead of the half million vehicles it produced last year.

Here’s the chart:

As Frik Els of Mining.com points out,

“When Tesla makes 20 million cars in a year it will need more than 30% of global mined nickel production in 2019 (2020 saw a 20%-plus reduction in output) for its batteries. Put another way, Tesla will have to buy the entire output of the top 6 producers – Norilsk, Vale, Jinchuan, Sumitomo, Glencore, BHP, and then some.”

Els continues, facetiously:

“Since Tesla is replacing graphite anodes with silicon, it’s not necessary to dwell on the fact that if this elusive scientific breakthrough is not commercialized at the speed of a Tesla in Ridiculous Mode, the carmaker would need 94% of the world’s natural graphite production by the time it hits 20 million cars a year. At least you can make more graphite.”

For cobalt, the requirement would be more than half of global production before 2030, and for lithium it would be a whopping 165%.

And, as followers of ARPN well know, rare earths may not in fact be “rare,” but that doesn’t mean they magically appear out of thin air like fairy dust.

While Mining.com’s number crunching and throwing shade may make Tesla’s numbers seem like pie in the sky constructs, they do underscore an important fact:

“The future energy system will be far more mineral and metal-intensive than it is today,” as Dr. Morgan Bazilian, Director of the Payne Institute and Professor of Public Policy, Colorado School of Mines testified before Congress in the fall 0f 2019, and several studies have since confirmed.

With the COVID-19 pandemic having underscored the challenges associated with the geopolitics of resource supply, and the green energy transition agenda having moved to the forefront under the new Biden Administration, securing and shoring up critical mineral resource supply chains is becoming increasingly paramount.

The current coronavirus pandemic may have thrown a wrench into the gears of many industries, but — against the backdrop of skyrocketing materials supply needs in the context of the green energy transition — Europe continues to forge ahead with the buildout of its large-scale battery gigafactory capacity. 

According to London-based Benchmark Mineral Intelligence, whose analysts forecast that at least European 16 plants will be operational by 2030, there have been “some issues with cell producers in Europe struggling to ramp cell production in new facilities to meet demand, but in terms of construction timelines the plants to date have remained on schedule.” 

With the World Bank forecasting that production of metals and minerals like graphite, lithium and cobalt will have to increase by nearly 500 percent by 2050 to meet global demand for renewable energy technology, this development comes as no surprise.  Growing mineral resource pressures in the context of the low-carbon transition are also prompting global miners to shift their traditional focus, as evidenced most recently by Rio Tinto’s decision to invest almost $200 to move to the next development stage of the lithium-borate Jadar project in Serbia.

While China continues to hold the pole position as the world’s largest producer of lithium ion batteries, a continuation of the European gigafactory buildout at the above-referenced pace would put Europe at a total annual production capacity of 446 GWh and place the region in second place.  It would also perpetuate the “bystander status” into which the United States has maneuvered itself in the context of the global battery arms race.

Earlier this year, Benchmark Mineral Intelligence’s managing director and member of the ARPN panel of experts Simon Moores argued that  

“[i]n February 2019, there were 70 battery megafactories in the pipeline of which 46 are in China and 5 in the USA. Today there are 136 of these super-sized electric vehicle battery plants in operation or being planned: 101 in China and 8 in the USA. China is building a battery gigafactory (megafactory) at the rate of one every week; the USA at one every four months. In 2019, China produced 72% of the world’s lithium-ion batteries whereas the USA only 9%.”

Testifying before the U.S. Senate in June of this year, Moores renewed his call for decisive U.S. action by invoking the U.S.’s successful creation of a widespread semiconductor industry in the 1980s:

“The lead that the USA built in semiconductors and computing power due to companies like Fairchild Semiconductor and Intel Corporation has sustained the USA’s dominance in global computing for over 5 decades.

Likewise, those who invest in battery capacity and supply chains today are likely to dominate this industry for generations to come.

It is not too late for the US but action is needed now.”

While U.S. policymakers are increasingly aware of the urgency of our nation’s critical mineral needs — a case in point being the formation of a bipartisan “Critical Materials Caucus” in the U.S. House of Representatives late last month) — political calculations in a watershed election year won’t make it easy for reform-minded lawmakers to chance the status quo. 

However, a look at Europe’s forging ahead with its gigafactory buildout should serve as a reminder that the rest of the world won’t wait for us.

At ARPN, we have long argued that the current push towards a lower-carbon future is not possible without mining, as green energy technology relies heavily on a score of critical metals and minerals. The World Bank’s latest report, entitled “The Mineral Intensity of the Clean Energy Transition,” published earlier this week in the context of the [...]

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