Tesla Might Use Materials from North America for its Battery Gigafactory amid Pollution Worry image

Tesla CEO Elon Musk plans to use for its $5 billion US battery factory only raw materials sourced in North America.

The electric vehicle maker does not plan to import the cobalt, graphite and other materials necessary for its Gigafactory, according to automaker’s spokeswoman Liz Jarvis-Shean.

“It will enable us to establish a supply chain that is local and focused on minimizing environmental impact while significantly reducing battery cost,” said Liz Jarvis-Shean.

Tesla’s move comes amid global interest in lowering graphite pollution and avoiding using industrial minerals from worldwide trouble spots such as central Africa. China has already started to shutter graphite mines to decrease the levels of pollution.

Tesla “is a high-profile company that is entering an age of supply-chain transparency,” said Simon Moores, an analyst at Industrial Minerals Data in London.

Tesla said that most part of the graphite it uses is synthetic, not mined and comes from Europe and Japan. Most of the global batteries use natural graphite mined in China, according to Industrial Minerals Data. Now, China, which is the biggest graphite producer, is closing numerous processing plants and mines although global demand keep increasing.
Analysts believe that Tesla might need to take its graphite from Canada and for cobalt it might have to go beyond Canada to Idaho and Minnesota.

“It’s very patriotic of them to do that, but it costs, and already the costs of these electric vehicles are quite high,” said Edward R. Anderson, chief executive officer of Tucson, Arizona-based TRU Group Inc., a consultant.

Panasonic deal
Panasonic is Tesla’s main suplier of  lithium-ion cells. Back in February, Tesla said it plans to partner with Panasonic to create a mega factory in the U.S. . The plant may require an investment of as much as $5 billion to build.

But Panasonic has not committed to investing in this mega project yet.

Joining Tesla’s “Gigafactory” battery project would raise investment risks, Panasonic President Kazuhiro Tsuga told reporters at a briefing in Tokyo on Thursday.