What if we took some numbers, raw numbers, no statistics and we used those numbers to try
and gather some idea of how many EVs Tesla can make based on the actual raw elements.
What if we begun
with the amount of raw ore is available to Tesla for their limiting factor, the batteries.
The limiting factor for the batteries, at least once there are enough factories,
will be nickel, at least for the time being, and then might become lithium later on.
Therefore I thought what if we worked out how many EVs Tesla
might actually be capable of producing based on their current nickel supply.
Tesla already have nickel contracts
in place for nickel from mining companies. Tesla have secured 42,000 tons a year
from New Caledonia’s Prony Resources, and on top of that Tesla also secured BHP for
Australian nickel at around 18,000 tons per year. Then Tesla in January said it would purchase
75,000 tonnes of nickel concentrate from a project being developed by Canada's Talon Metals.
Tesla have also signed a deal with Brazilian mining giant Vale. I believe the amount of
tons supplied doesn't appear to be disclosed, but in the past Vale have had plans to reach
360,000 tons a year, which they may have increased by now. However according to the
company's first quarter performance report, Vale sold a total of 20,000 tonnes of Upper
Class 1 nickel. However they intend on allocating 30 to 40% to the EV sector.
Wow, is it me, or does this not
sound like super useful information? And I expect you can all see where I am going here. We have
an estimate of just how much nickel Tesla will have a their disposal. So let's work it out.
Now although we don't know the size of the contract from Vale yet, we can at least add
up the other nickel contracts, and it looks like Tesla will have 135,000 tons of nickel a year.
Is that a lot? Sounds like a lot, well how about we put it into some perspective.
What are we trying to
do here? Well what does Tesla want this nickel for? It's for Tesla's in-house 4680 cells. And
if nickel is the current limiting factor, then we are going to assume that the level of nickel Tesla
have secured, will be a pace at which they can manufacturer, at least soon within time.
Now all of this nickel will be used in EVs, none of it will go into energy storage,
as LFP batteries are a substantially better alternative for that application.
Right, so if we calculate how
many EVs can be made from all this nickel, then that possibly might give us some sort of indicator
as to just how many vehicles Tesla are planning on making. Now it would appear that EV batteries
tend to have between 30 and 50 kg of nickel, and supposedly the Model 3 only has 30 kg, but other
sources say Tesla's have 40 kg. Bear in mind that the 4680 cell will likely use less nickel
than 2170. Although the cathodes in 2170 use less, the 2170 cell is not as efficient, and thus more
cells are required. Therefore a 4680 cell should use less nickel in the battery pack, and as the
chemistry improves, even less over time. Anyway, with all that, let's just say
40kg of nickel per vehicle. Or around $1200 at today's market prices.
Tesla have 135,000 tons of nickel every year
from these suppliers, plus whatever Vale can offer too. Each battery pack requires 40kg of nickel,
so how many times does 40 go into 135 million? Well, I'll tell you.
It's approximately 3.4 million 4680 vehicles a year. Wow, Tesla has already secured enough
nickel to produce enough batteries, to power over 3 million vehicles with 4680 cells a year.
Ok, Tesla has these
contracts for years, getting enough nickel for over 3 million vehicles a year. Which is
actually probably quite close to 200 GWh a year, or about the estimated cell capacity of Texas.
Wow, 3 million vehicles a year. For me 3 million is a good target for Tesla, I think at this stage,
is when we actually start feeling the economies scale. Plus all the extra margin that the 4680
cells and new manufacturing processes generate. Yup 3 million will be a big milestone, except this
isn't 3 million, well not total. This is all extra on top of Fremont and Shanghai.
Yea we have Fremont at around 6 or 700,000 units next year,
and China maybe even as high as a 2 million a year run rate, according to some sources.
So actually that is close to 6 million vehicles. Oh, wow. I was just going to
say that at 3 million a year I put the stock price at around $2500, you know,
in a more stable economic environment, but 6 million, well that's even better isn't it?
Just to repeat: Tesla will supposedly be making close to 3 million units a year
just from China and Fremont expected close to the end of next year.
Tesla have built some big factories that can make a lot of cars, and battery cells. These
cell factories are estimated to have a capacity of around 200 GWh a year each. We know that
Tesla have signed contracts to provide enough nickel already for about 200 GWh.
I mean to be honest if Tesla's stock is at $1,000 then I'm pretty good either way,
but if we start to see these numbers, then think 3 to 5x just for autos.
But when can Tesla
hit these levels? The contracts are in place, the mining is happening, what's the hold up?
I think we just need those finishing touches on the 4680 line, and then hopefully it should
be good to go. I mean really, why would Tesla sign these contracts for nickel if they weren't
really confident that they could use all this nickel and successfully make their 4680 cells?
Surely, this is further evidence of confidence in the future of this company.
Alright, I know you're
all very clever, as you're TE viewers, so I am sure a lot of you want to tell me, or comment,
about how the Cybertruck is made of stainless steel and one of the ingredients in stainless is
nickel. Yup that is true, and Tesla will need to secure nickel for their cold rolled steel.
But is it going to have much impact on batteries, as the exoskeleton is using a mineral that is a
limiting factor in cell production and thus an opportunity cost on having more cars on the road.
Well it would appear that nickel is generally around 10% of stainless,
and as there is quite a bit of steel on the Cybertruck, I am going to guess it
could come in at around 500 kg, i.e. 50 kg of nickel per cybertruck. Ok, that's interesting,
the Cybertruck consumes at least twice as much nickel as other vehicles,
that is quite an expensive truck then, when you factor in opportunity costs.
If Tesla makes 1/2m Cybertrucks a year then that's an additional 25,000 tons a year of nickel,
just for stainless steel. Hmmm, now Elon would be well aware of this. So what if nickel
actually isn't quite the limiting factor we are lead to believe?
Oh also we don't yet know the size of the contract
that Tesla have with Vale, I am not joking, but I wouldn't be surprised if it was 100,000 tons,
you know almost doubling the entire nickel supply, or about enough nickel for 5 million
vehicles cyber truck included. And all these mines appear to still be ramping too,
so these nickel supplies will likely increase along with Tesla's number of factories.
Yea, Cybertruck included, but perhaps
not the semi truck. Of course out of all vehicles, the semi truck is going to be consuming the most
nickel. But I think Tesla is holding back on the semi, along with the batteries, is the autonomy,
the semi truck is about 3 times as valuable with autonomy. These machines will require a lot of
nickel, over a quarter ton perhaps. That's a big opportunity cost for other vehicles.
Wow, so what,
Tesla could be up to around 1/4 million tons of nickel a year from these suppliers probably
reasonably soon. That is enough to feed Germany and Berlin for their 4680 cells. Done deal, Tesla
secured enough nickel for the next several years, or probably closer to the whole decade according
to some of the targets these mines want to reach. But also don't forget, I just made a video on
Tesla's new gigafactory. It looks like Tesla are setting up shop in Indonesia. Now although Tesla
seem to have about 1/4 million tons of nickel secured already, well Indonesia has objectives
to get to 1 million tons a year. I think they are currently about a 1/3 the way there.
But all the expansion, well who else is going to be able to consume that much nickel? It's
mainly going to be Tesla isn't it? Possibly in the ball part of 1/2 million tons of nickel.
Or tripling the current supply. Taking us to enough batteries for around 15
million vehicles a year. But we are aiming for 20 million, so where will the other 5 million
come from. Well we have to take a step back. Because Elon also said around 2/3 of Tesla EVs
will end up being LFP batteries, which is about 13 of the 20 million vehicles.
So what Tesla only need enough
nickel to make 7 million EVs a year? Well kind of, but that's with today's EV cell technology.
Tesla are not finished inventing new batteries. Aside from in-house LFP, Elon has also been vocal
about the potential of using a manganese cathode. Manganese cathodes aren't entirely new, but still
not ready for EV mass production, outside of labs. There is 5 times as much manganese on the planet
as their is nickel, it is also 1/10 the price of nickel, and offers similar energy density
to nickel. At a guess I would say Tesla could get over 400 miles in a Model Y with perhaps an
80 kWh battery along with all the other updated technology.
In fact if Tesla can use manganese, then nickel is really only needed in the semi
truck. I say needed, as it's application really does require that much power and the longer range.
Whether the Cybertruck truck gets 400 miles of 500 miles of range is not of
as much consequence for the overall mission. So perhaps the nickel will mainly be reserved
for the semi truck and few specialist vehicles like the roadster, or a Plaid cybertruck.
Alright, I know there
is so much negativity floating around now, a lot of haters out there, and a lot of people who know
nothing about the company, but for some reason think they are some prophetic investor and know
that Tesla's stock price is going to 200 dollars. Yea, don't listen to them, they don't follow the
company like you, or have the first idea. We try to stay objective, and stick to the fundamentals.
Anything out there without real value is being sucked dry.
Such as the all the altcoins, and NFTs. I did mention that back in the past,
signs of an overheated economy, when investors start putting their money into things with
actually no value. All the other EV companies are practically at their break up values.
They are trying to punish Tesla by the same metric. Don't fall for it.
Like I have been saying Tesla are just getting their ducks in a row,
it looks like they have secured their supplies,
now just need to finish off the last refinements on that 4680 line, and we are good to go.