What Does Tesla's New Battery Research Partnership Mean For Graphite, Lithium And Cobalt?
Tesla Motors' share price rose this week following news that it's partnered with preeminent lithium-ion battery researcher Jeff Dahn to lower the cost of its batteries. Critical metals investors are no doubt wondering what the new partnership means for lithium, graphite and cobalt.
Tesla's co-founder and CTO checking out a Tesla model with Dr. Jeff Dahn. Photo credit: Danny Abriel, Dalhousie University.
Tesla Motors' (NASDAQ:TSLA) share price rose this week following the company's announcement that it's partnered with preeminent lithium-ion battery researcher Jeff Dahn to lower the cost of its batteries. Tesla's share price has gained just under 5 percent, or $13, in the past five days, and was up another $1.48 on Thursday. A chemistry professor at Canada's Dalhousie University, Dahn has been researching lithium-ion batteries since 1978. As Fortune reported, Tesla has signed a five-year agreement to improve the energy density and lifespan of its lithium-ion batteries, thereby improving costs. Currently, there's a tradeoff between battery lifespan and energy density, but Dahn will try to crack the problem. Although no dollar figure has been disclosed for the agreement, Tesla will support Dahn and a team of roughly 20 graduate students, postdocs and technical staff. The partnership will come into effect in 2016, once Dahn's current lithium-ion battery project — funded by the Natural Sciences and Engineering Research Council of Canada and 3M (NYSE:MMM) — comes to an end. As Quartz points out, the development is an important one. The publication notes that Tesla CEO Elon Musk "has always played down the prospect for big battery advances," sticking to incremental improvements on batteries from Panasonic (OTCMKTS:PCRFY); the partnership with Dahn thus signals a potential change of heart. Critical metals investors might be wondering what the agreement means for lithium, graphite and cobalt, and to be sure, there have been a few hints at how raw materials might play into the situation from several news outlets. For example, Fortune states that "Musk has said the company will also examine pre-cursor materials, particularly nickel, and talk with nickel mining companies in Canada to find innovative ways to reduce the cost," while The Wall Street Journal notes that one of Dahn's specialties is silicon anodes, a less expensive alternative to graphite.