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Tesla: Significant Margin Growth Via Raw Materials Integration

May 03, 2022 10:00 AM ETTesla, Inc. (TSLA)209 Comments


  • Two key battery metals, lithium and nickel, are experiencing extraordinary pricing pressure at the moment and, with upcoming supply shortages, there’s little sign of reprieve any time soon.
  • Tesla looks to be interested in the production and refining of both metals, in order to secure its future supply and significantly reduce its cost of production.
  • By partnering with, or buying, juniors near production, Tesla could improve its automotive margin by another 1.2% and, more importantly, ensure it is able to sustain maximum production capacity.
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Pile of lithium-rich salt material from deposits for Li-Ion battery manufacturing in EV industry, Lithium hexafluorophosphate extract from rechargeable energy cell in recycling process 3D illustration

Black_Kira/iStock via Getty Images

I don't think there's a person on this website who hasn't heard of Tesla (NASDAQ:TSLA). Though what readers might be a little less aware of is a growing issue regarding the company's supply of critical

Battery production costs last 10 years

Bloomberg NEF

Telsa Liquidity over the last 10 years

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Tesla's performance over the last year has been pretty spectacular, delivering returns of over 25% to shareholders. However, I believe that EV suppliers stand to benefit even more from the growth of the EV industry than any automaker. My actively managed portfolio, available exclusively to subscribers, has returned over 50% since its creation on April 1, 2021, powered by weekly articles with actionable advice and in-depth research. Interested? Consider a two-week free trial!

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