Driven by a future to see the dominance of electric vehicles, Tesla is forming an alliance with Glencore. Tesla will benefit by receiving cobalt for the use in Gigafactories for the production of Lithium-Ion batteries.
By Godfrey Benjamin
Updated
2 mins read
The giant stride Tesla Inc (NASDAQ: TSLA) is making in the auto industry deserves a great commendation. The stock performance in the past weeks is an indication of the positive growth trajectory of the electric car company. Tesla stock is however experiencing a downturn as it’s stock arrows are pointing downward with a 0.89% loss at the close of trading yesterday leaving the stock at $982.13. A rebound – as has already shown in today’s pre-market where Tesla (TSLA) is up 0.60% – is expected with the company’s proposed partnership with mining giant Glencore in a bid to integrate cobalt in its new Gigafactories.
It’s worth noting that Tesla is a profitable company with recorded revenue of $5.99 billion. While the price of electric vehicles has by about 80% this decade which can be partly attributed to the fall in the price of batteries. Despite this, Tesla has the right response model to generate profits with price slash and this has the potential to translate into a big payday for the company and its CEO Elon Musk.
TSLA plans to use cobalt mined by Anglo-Swiss mining company Glencore in the Democratic Republic of Congo in its new Gigafactories in Berlin and Shanghai. The cobalt mined will be used in making Lithium-ion batteries to power the company’s novel electric vehicles. While the financials of the deals remain unknown, it will see Glencore supplying Tesla with an estimated 6,000 tons of cobalt annually with an estimated price of $30,000 per ton of the material.
The Democratic Republic of Congo is known to have some of the largest deposits of Cobalt which is also very useful in producing Lithium-ion batteries found in mobile phones. Before now, Tesla (TSLA) alongside other tech companies has been sued on ethical issues surrounding cobalt sourcing and child labor.
Reacting to this, Tesla stated in a recently released impact assessment report:
“Because Tesla recognizes the higher risks of human rights issues within cobalt supply chains, particularly for child labor in the Democratic Republic of Congo (DRC), we have made a significant effort to establish processes to remove these risks from our supply chain.”
Industry experts believe that Tesla’s cooperation with Glencore would have considered this ethical issue.
For other news from the transport industry, please, follow this link.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
