The Race to Supply EV Makers With Nickel

The Countdown to a New Tesla Battery

Some Tesla (TSLA) enthusiasts are counting down the days until September 22 when the company is expected to showcase a new battery. This battery will be cheaper and longer-range than previous models. However, as excitement about the new battery ramps up, some investors and activists are concerned about the environmental impact of mining the nickel needed to build these batteries.

Nickel is crucial for lithium-ion battery technology because it boosts energy density and gives electric cars the power to drive farther on each charge. Nickel already costs more than $15,000 per ton, and demand for the metal is expected to jump six-fold over the next decade.

Environmental Concerns

As demand for nickel soars, mines in Indonesia backed by Chinese investors are scaling up production. However, these companies’ practices could take a significant environmental toll.

Processing a rock that is 1% nickel creates enormous amounts of waste. Some of this waste would be dumped 200 meters below sea level, which could hurt Indonesia’s coral reefs and sea life.

Consumers and governments love electric vehicles because they are environmentally friendly. However, if EV companies cannot find safe ways to harvest materials for their batteries, their reputations could suffer.

Creative Alternatives

The good news is that mining is not the only way to harvest nickel and other materials needed to meet the growing demand for EV batteries. Several startups are hard at work finding ways to extract materials from old car and cell phone batteries.

Recycling these materials could become a huge industry, and could help with making sure that EVs’ positive environmental impacts are not counteracted by harmful mining practices. In the meantime, high-profile names like Tesla and Nikola (NKLA) will likely need more nickel. After an earnings call this past July, Elon Musk pleaded with miners for more of the key ingredient. “Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way,” Musk said .

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
[cd_external_links]
SOSS090301