Sudbury mine: Tesla signs secret nickel supply deal with Vale — reports

Sudbury a major source of Brazilian mining company’s nickel production

Tesla Inc. has signed an undisclosed deal with Brazilian mining company Vale S.A. for the supply of nickel to the electric car maker, Bloomberg News is reporting, citing sources.

The price of nickel, which is essential to making batteries for electric vehicles, had been rising steadily even before the conflict in Ukraine drove it up even further and triggered chaos at the London Metal Exchange in early March.

“What Tesla has done with nickel is a hidden competitive advantage,” Gene Munster, managing partner of Loup Ventures told Bloomberg. “Tesla continues to be a couple of steps ahead of the rest.”

CEO Elon Musk has repeatedly flagged nickel supply as the company’s biggest concern as it boosts output, and the metal’s availability is a source of anxiety throughout the EV sector. Battery-sector demand for nickel is expected to jump to about 1.5 million tons in 2030 from 400,745 tons this year, according to BloombergNEF.

Tesla has been less affected by supply chain issues arising out of the COVID-19 pandemic, when compared with other automakers that have cut production as they face a shortage of several components including chips and battery metals of EVs.