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Tesla locks in world’s largest cobalt supplier Glencore for Gigafactory Shanghai, Berlin
Tesla has secured a deal to purchase 12 million pounds of cobalt annually from Glencore, a Swiss-based company that is recognized as the world’s largest miner of the metal. The partnership will keep Tesla away from a possible supply squeeze of cobalt as more automakers aim to break into the EV sector in the future.
The deal will supply both Giga Shanghai and Giga Berlin with enough of the metal to avoid a shortage in the future. With the electric vehicle sector continuing to grow, and demand for Tesla vehicles expanding in both Europe and Asia, the company has struck a deal that will alleviate any supply shortage concerns in the coming years.
The terms of the deal are unknown, and neither company responded to inquiries from Bloomberg, which first reported the partnership between the electric car maker and the cobalt supplier.
In both China and Europe, popular automakers like Volkswagen, BMW, and BYD are preparing for a future with electric transportation. In 2017 and 2018, a shortage in cobalt caused prices to spike, which seems to have given Tesla CEO Elon Musk the indication that his company must begin developing a battery that was less reliant on the metal. While Tesla continues to work on battery cells that are free of cobalt, the deal with Glencore ensures that the electric car maker will not be in short supply in the foreseeable future.
Tesla had been discussing the terms of a deal with Glencore since mid-January. However, Glencore’s automotive supply chain goes past the Silicon Valley-based automaker. The company signed an agreement with BMW in April 2019, and also with Korean battery manufacturer SK Innovation in December 2019.
Tesla is looking to ramp up production outside of the United States as demand continues to increase across the globe. With the company planning to begin a steady push of the Model Y in Europe and Asia in 2021, Tesla’s battery supply chain must be efficient and dependable to ensure a steady flow of reliable electric vehicles.
Giga Shanghai is currently producing vehicles at a run-rate of 200,000 a year, with production expected to increase when Tesla completes phase 2A of the facility. The completion of the second phase in China will introduce the Model Y to the largest automotive market in the world.
Meanwhile, Giga Berlin is still roughly a year away from its initial production push, which will begin with the Model Y. However, Tesla anticipates an annual production rate of 500,000 electric cars per year.
Tesla recently expanded on its use of cobalt within its battery cells in the 2019 Impact Report. The company currently utilizes “nickel-rich cathode materials” in its cells, which contain less cobalt concentration than cathode chemistries that other companies use in their batteries.
The company also expanded on its practices of using cobalt, which is controversial on its own due to its mining practices in the Democratic Republic of Congo. Glencore owns a mine in the DRC, but it is currently closed for maintenance. Tesla’s suppliers are required to follow the company’s “Supplier Code of Conduct” and its “Human Rights and Conflict Minerals Policy.” Each of Tesla’s suppliers is subjected to an annual third-party to ensure safe and humane mining practices.
Tesla’s deal with Glencore will ensure safe and humane cobalt mining, but it will also ensure the company’s long-term success as production and demand for continue to rise. The electric automaker will undoubtedly let go of any concern that may have to do with supply shortages while the industry continues to grow amid more competition entering the sector.
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Armored Tesla Cybertruck “War Machine” debuts at Defense Expo 2025
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Tesla Megapacks chosen for 548 MWh energy storage project in Japan
Tesla plans to supply over 100 Megapack units to support a large stationary storage project in Japan, making it one of the country’s largest energy storage facilities.
Tesla’s Megapack grid-scale batteries have been selected to back an energy storage project in Japan, coming as the latest of the company’s continued deployment of the hardware.
As detailed in a report from Nikkei this week, Tesla plans to supply 142 Megapack units to support a 548 MWh storage project in Japan, set to become one of the country’s largest energy storage facilities. The project is being overseen by financial firm Orix, and it will be located at a facility Maibara in central Japan’s Shiga prefecture, and it aims to come online in early 2027.
The deal is just the latest of several Megapack deployments over the past few years, as the company continues to ramp production of the units. Tesla currently produces the Megapack at a facility in Lathrop, California, though the company also recently completed construction on its second so-called “Megafactory” in Shanghai China and is expected to begin production in the coming weeks.
READ MORE ON TESLA MEGAPACKS: Tesla Megapacks help power battery supplier Panasonic’s Kyoto test site
Tesla’s production of the Megapack has been ramping up at the Lathrop facility since initially opening in 2022, and both this site and the Shanghai Megafactory are aiming to eventually reach a volume production of 10,000 Megapack units per year. The company surpassed its 10,000th Megapack unit produced at Lathrop in November.
During Tesla’s Q4 earnings call last week, CEO Elon Musk also said that the company is looking to construct a third Megafactory, though he did not disclose where.
Last year, Tesla Energy also had record deployments of its Megapack and Powerwall home batteries with a total of 31.4 GWh of energy products deployed for a 114-percent increase from 2023.
Other recently deployed or announced Megapack projects include a massive 600 MW/1,600 MWh facility in Melbourne, a 75 MW/300 MWh energy storage site in Belgium, and a 228 MW/912 MWh storage project in Chile, along with many others still.
What are your thoughts? Let me know at zach@teslarati.com, find me on X at @zacharyvisconti, or send us tips at tips@teslarati.com.
Tesla highlights the Megapack site replacing Hawaii’s last coal plant
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Elon Musk responds to Ontario canceling $100M Starlink deal amid tariff drama
Ontario Premier Doug Ford said, opens new tab on February 3 that he was “ripping up” his province’s CA$100 million agreement with Starlink in response to the U.S. imposing tariffs on Canadian goods.
Elon Musk company SpaceX is set to lose a $100 million deal with the Canadian province of Ontario following a response to the Trump administration’s decision to apply 25 percent tariffs to the country.
Starlink, a satellite-based internet service launched by the Musk entity SpaceX, will lose a $100 million deal it had with Ontario, Premier Doug Ford announced today.
Starting today and until U.S. tariffs are removed, Ontario is banning American companies from provincial contracts.
Every year, the Ontario government and its agencies spend $30 billion on procurement, alongside our $200 billion plan to build Ontario. U.S.-based businesses will…
— Doug Ford (@fordnation) February 3, 2025
Ford said on X today that Ontario is banning American companies from provincial contracts:
“We’ll be ripping up the province’s contract with Starlink. Ontario won’t do business with people hellbent on destroying our economy. Canada didn’t start this fight with the U.S., but you better believe we’re ready to win it.”
It is a blow to the citizens of the province more than anything, as the Starlink internet constellation has provided people in rural areas across the globe stable and reliable access for several years.
Musk responded in simple terms, stating, “Oh well.”
Oh well https://t.co/1jpMu55T6s
— Elon Musk (@elonmusk) February 3, 2025
It seems Musk is less than enthused about the fact that Starlink is being eliminated from the province, but it does not seem like all that big of a blow either.
As previously mentioned, this impacts citizens more than Starlink itself, which has established itself as a main player in reliable internet access. Starlink has signed several contracts with various airlines and maritime companies.
It is also expanding to new territories across the globe on an almost daily basis.
With Mexico already working to avoid the tariff situation with the United States, it will be interesting to see if Canada does the same.
The two have shared a pleasant relationship, but President Trump is putting his foot down in terms of what comes across the border, which could impact Americans in the short term.
Armored Tesla Cybertruck “War Machine” debuts at Defense Expo 2025
Tesla Megapacks chosen for 548 MWh energy storage project in Japan
