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Tesla Gets New Nickel Supplier: Everything You Want To Know

Tesla Inc (NASDAQ: TSLA) agreed to purchase around 42,000 tonnes of nickel in a multi-year deal making Prony Resources its key metal supplier, Reuters reports.

The New Caledonian miner, which acquired the loss-making nickel operations in the French territory from Brazil’s Vale SA (NYSE: VALE), aims to produce 44,000 tonnes of nickel by 2024 double its expected 2021 output. Prony initially expects its nickel to supply Tesla’s battery supply chain in Asia.

Electric vehicle makers have prioritized securing sufficient nickel supplies, a key ingredient in automotive batteries, and seeking sustainable, low-carbon nickel supplies.

Prony is 51%-owned by New Caledonia’s provincial authorities. Trafigura has a 19% stake, and a joint venture holds the rest. Prony expects the nickel market to return to a surplus for four years from 2022, partly as top producer Indonesia will boost supply before exponential battery demand outstrips supply again.

Prony aims to borrow 220 million euros ($254.2 million) from the French state, on top of a 200 million state loan earlier this year to help cover production investments and improve waste treatment at its nickel site.

Prony will also partner to develop a new electricity plant to halve its carbon emissions by 2030 and become carbon neutral by 2040.

The future power plant will be solar-based and replace a current coal-fired installation.

Price Action: TSLA shares traded higher by 0.89% at $812.89 in the premarket session on the last check Wednesday.

Photo by Blomst from Pixabay

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