China’s Grip On Tesla’s Battery Provide Chain Highlighted In New Report

Tesla leans closely on China for its vitality storage wants, a brand new report indicated. Almost 40 % of the 61 firms Tesla sources its lithium-ion battery supplies from are Chinese language, the evaluation discovered.

Japanese publication Nikkei launched the report yesterday, with inputs from Tokyo-based AI know-how firm Fronteo. The latter harnessed machine-learning algorithms to dissect Tesla’s intricate provide chain net. The 2 entities recognized over 13,000 firms believed to be Tesla suppliers.

Chile has 36 % of world lithium reserves, whereas Chile and Australia mix for 80 % of world EV battery materials extraction. However reliance on China appears inevitable as 60 % of world lithium refining takes place on Chinese language soil. Tesla didn’t instantly reply to our request for remark.

China’s dominance additional extends to specialised domains, like nonferrous metallic smelting – 40 % of the 42 firms engaged within the course of are Chinese language. The nation additionally holds the highest share for “inorganic chemistry” firms – 33 % of the 102 firms specializing in inorganic chemistry are Chinese language, as per the research.

The Japanese publication additional analyzed Tesla’s reliance on China by score its Chinese language suppliers on a scale of ten, utilizing the “chokepoint rating” index methodology. Tesla provider and lithium merchandise producer Ganfeng earned a chokepoint rating of 6.8, whereas inorganic compounds producer Novoray scored 7.1. Zhejiang Huayou Cobalt scored 5.7.

As US-China commerce relations simmer, reliance on imported supplies may pose a threat for manufacturers like Tesla. On August 1, China imposed export controls on germanium and gallium, supplies utilized in semiconductors. China’s transfer got here in response to US export restrictions on superior chips.

To mitigate the implications of the US-China commerce conflict, Tesla has a number of battery manufacturing growth plans within the pipeline: Panasonic will enhance its battery manufacturing at Gigafactory Nevada by 10 %, whereas efforts seem underway to construct extra packs on the Fremont manufacturing facility.