ASX shares Tesla (NASDAQ:TSLA) needs to survive

Tesla cannot continue to grow without ASX shares that mine materials for lithium batteries. The scale will need as much supply as possible.

| More on:
hand reaching out of water for life buoy representing asx shares needed for Tesla to survive

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Tesla Inc (NASDAQ: TSLA) share price has been one of the great gravity defying shares of 2020. Tesla is at the vanguard of electric cars, which is impressive enough, but also in the field of power transmission and distribution. Accordingly, there is an incoming wave of predominantly lithium batteries designed to be used for multiple purposes. These require materials produced by some ASX shares. 

Building batteries is not going to be possible without a steady, high quality supply of the necessary materials. Lithium battery production will need the continuous supply of mining companies operating at scale. Companies like the many ASX shares producing these materials. 

Tesla needs ASX shares

In a a conference by BenchMark Mineral Intelligence in Perth in 2018, BenchMark Managing Director, Mr Simon Moores, said that by 2028, "…the the giga-factories being built by Elon Musk's Tesla would need 840,000 tonnes per year of lithium, 193,000 tonnes per year of cobalt, 1.1 million tonnes per year of graphite anode, and 480,000 tonnes of nickel chemical."

Nonferrous metals and minerals featuring highly in lithium-ion batteries are lithium, cobalt, nickel, manganese, graphite, copper and aluminium. The first four are used in cathodes, although lithium is also used in electrolyte. The last three are used in the anode. In particular, graphite wrapped in an alloy of copper or aluminium.

Cathode materials

A range of ASX shares produce lithium. For example, companies like Galaxy Resources Limited (ASX: GXY), Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS). Orocobre is building an industrial chemicals and minerals business in Argentina through the construction and operation of lithium brine, potash and boron projects. It has also built a lithium processing facility in the north of Argentina.

South32 Ltd (ASX: S32) is a leading miner of manganese. Moreover, in FY20 the company produced 854,000 wet metric tonnes of manganese ore in the June quarter. South32 has a 60% interest in its Australian manganese operations. These are the Groote Eylandt Mining Company Operation (GEMCO) and the Tasmanian Electro Metallurgical Company Operation (TEMCO).

Anode materials

Ecograf Ltd (ASX: EGR)  has two bases of operation. First, in Tanzania it is developing the Epanko Graphite Project. This is a long life, highly profitable graphite project. The forecast for this plant is 60,000 tonnes per year of graphite products. Second, the company is developing a processing plant in Kwinana, Western Australia. This will aim to produce spherical graphite using a new eco-friendly process to sell directly to lithium-ion battery manufacturers. The plant will draw both from recycled battery materials as well as graphite flak products from the Americas, Asia and Australia. 

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A young female investor sits in her home office looking at her ipad and smiling as she sees the QBE share price rising
Share Market News

5 things to watch on the ASX 200 on Friday

A good finish to the week is expected for Aussie investors.

Read more »

A man has computer-generated images rushing through his head indicating an AI (Artificial Intelligence) concept of a communication network.
Technology Shares

ASX investors are obsessed with Nvidia shares! Here's why

The global chipmaker reported a 94% increase in annual revenue in the third quarter.

Read more »

A man wearing a red jacket and mountain hiking clothes stands at the top of a mountain peak and looks out over countless mountain ranges.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another disappointing day for ASX investors this Thursday.

Read more »

two racing cars battle to take first place on a formula one track with one tailing the the leader and looking to overtake the car.
Opinions

Down 21% in 2024. This ASX 300 stock looks like a money-making monster

Profits are expected to plunge, but the future could still be bright.

Read more »

A businesswoman exhales a deep sigh after receiving bad news, and gets on with it.
52-Week Lows

Down 68% from highs, this ASX 200 stock just hit a 4-year low. Time to pounce?

Is this beaten down stock a buy? Let's see what one leading broker is saying.

Read more »

two men smiling with a laptop in front of them, symbolising a rising share price.
Share Gainers

Why Pinnacle, PWR, Race Oncology, and Vulcan shares are flying today

These shares are having a good session on Thursday. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Accent, Sayona Mining, Web Travel, and Weebit Nano shares are dropping today

These shares are having a tough time on Thursday. Why are they being sold off?

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Share Market News

Insider buying alert: 3 ASX 200 shares directors are snapping up right now

Directors in some of Australia's blue-chip businesses aren't shying away from the market.

Read more »