Tesla to Buy Nickel from New Caledonia, Become Adviser for Project: Report

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Amidst a backdrop of EV parts supply shortages for both the semiconductor chip typical in most EVs and electronics in general, as well as increasingly high demand for nickel-heavy EV battery cells in general, Tesla has secured a new and important nickel deal abroad.

Tesla has made arrangements to purchase nickel from a mine in New Caledonia, a set of islands off the coast of Australia, as reported by Financial Times, citing sources familiar with the matter. The move will secure another stream of nickel production for the electric vehicle (EV) company, whose CEO Elon Musk previously stated that securing nickel was the company’s “biggest concern.”

As a result of the deal, Tesla will become a technical adviser on the Pacific island’s Goro nickel mine, and will get long-term access to its nickel through a deal with the New Caledonian government.

While New Caledonia is one of the world’s largest nickel suppliers, it has also been riddled with protests as recently as December, from groups seeking independence and opposing the sale of the Goro mine. Attempts at independence have largely been ongoing for the Kanak people of the region, and have been closely tied to the Goro mine, since nickel is such a major player in the New Caledonia economy.

Last year, Musk stated that he and Tesla would award a huge contract to anyone who could ethically and sustainably source nickel. As the price of nickel has rallied 26% over the last year, largely due to the growth in EVs, Tesla has also seen investment from Chinese companies in Indonesia to keep the nickel stream flowing.

Regardless, Tesla’s new deal with the New Caledonia government should provide the company with ample nickel to keep up with EV battery cell demand in the years to come, which will ultimately benefit EV enthusiasts around the world.

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