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The Race to Supply EV Makers With Nickel

The Countdown to a New Tesla Battery

Some Tesla (TSLA) enthusiasts are counting down the days until September 22 when the company is expected to showcase a new battery. This battery will be cheaper and longer-range than previous models. However, as excitement about the new battery ramps up, some investors and activists are concerned about the environmental impact of mining the nickel needed to build these batteries.

Nickel is crucial for lithium-ion battery technology because it boosts energy density and gives electric cars the power to drive farther on each charge. Nickel already costs more than $15,000 per ton, and demand for the metal is expected to jump six-fold over the next decade.

Environmental Concerns

As demand for nickel soars, mines in Indonesia backed by Chinese investors are scaling up production. However, these companies’ practices could take a significant environmental toll.

Processing a rock that is 1% nickel creates enormous amounts of waste. Some of this waste would be dumped 200 meters below sea level, which could hurt Indonesia’s coral reefs and sea life.

Consumers and governments love electric vehicles because they are environmentally friendly. However, if EV companies cannot find safe ways to harvest materials for their batteries, their reputations could suffer.

Creative Alternatives

The good news is that mining is not the only way to harvest nickel and other materials needed to meet the growing demand for EV batteries. Several startups are hard at work finding ways to extract materials from old car and cell phone batteries.

Recycling these materials could become a huge industry, and could help with making sure that EVs’ positive environmental impacts are not counteracted by harmful mining practices. In the meantime, high-profile names like Tesla and Nikola (NKLA) will likely need more nickel. After an earnings call this past July, Elon Musk pleaded with miners for more of the key ingredient. “Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way,” Musk said .

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