Tesla could enter the mining industry to procure essential minerals

Tesla’s shareholder meeting on Tuesday saw it’s iconic and outspoken CEO Elon Musk talk about his company’s operations and its plans for this year and the next. Musk announced intentions for the unveiling of an all-electric pickup truck by the end of 2019 and that for a semi-truck by the end of 2020. However, what was perhaps more interesting was Musk’s announcement of the probability of his company’s entry into the mining sector.

Tesla operates its massive Gigafactory in Nevada in a limited partnership with Panasonic, which makes the cells that Tesla uses to manufacturer battery parks for its electric vehicles. But the production of its lithium-ion batteries requires adequate supplies of nickel, copper, and lithium, making these minerals lifeblood of sorts for the California based electric car maker. Problems in their supply pose significant hurdles in the manufacture of batteries, which later translate into production delays and increasing costs. Tesla’s entry into mining could improve the overall logistics scenario for the corporations as it looks to establish additional Gigafactories on each continent as part of its plans to scale production. Furthermore, a move into mining of the essential minerals could also enable Tesla to consolidate some elements of its supply chain and even ramp up production.

The company has been hit with numerous manufacturing delays which added to its financial woes, all of which Musk needs to address. It remains to be seen as to how Elon Musk would overcome the obstacles and meet the market demand.