Silicon vs graphite anodes?The Investing News Network got in touch with Simon Moores of Benchmark Mineral Intelligence to get a bit more insight into some of those possibilities. Speaking to the potential for a switch to silicon anodes, Moores said he doesn't see that change happening, at least not anytime soon. "In the medium term, no, I don't think Tesla or any mainstream battery producer will be using silicon anodes," he said. "It's still a lab-scale test material and therefore a theoretical concept. Silicon anodes have been discussed for years, but fundamental problems remain, including expansion on charge." Moores added that he's heard of a concept whereby graphite-coated silicon anodes were used to help limit expansion on charge, but stressed that it's "still one of many hurdles it needs to overcome." He added, "I can't see Tesla using this technology in its mainstream batteries for some time." Still, considering what could happen in the graphite space if silicon anodes do turn out to be successful, Moores admitted that the scenario would see a drop in graphite demand from anodes. "It would see a drop in graphite used in anodes, no doubt. But from what I have seen in the marketplace, graphite is being used in conjunction with silicon to produce the most promising silicon-based anodes in a test phase," Moores said. "It's still a long shot though, and it's a development for the next 10+ years." What about lithium and cobalt? Of course, while Dahn's research will be focused on the energy density and lifespan of lithium-ion batteries, some investors might be wondering whether the cost reduction side of things will include attempting to decrease the amounts of other raw materials involved in the batteries, such as lithium and cobalt. "There is a trend in the industry to used less raw materials including lithium and cobalt in batteries, through fine grinding / micronising innovations which creates a greater surface area," stated Moores. However, he also stressed that such a trend would be largely offset by rising demand.
"This is a slow trend however that is being countered by the significant growth in all battery markets. So we expect the amount of raw material per battery to fall slightly but the overall demand to increase. ," he added.In-house suppliers and processors Beyond the research agreement, The Wall Street Journal also points out that Tesla is "aiming to reduce its battery costs by bringing in-house the suppliers and processing of lithium, cobalt, graphite and nickel." "This actually means they will be eventually making the anode and cathode materials themselves and will be locking up long-term supply agreements for the graphite, lithium, cobalt, aluminum and nickel," said Moores, adding that this has always been the plan, but that it will more likely take shape around phase 2 or 3 of the gigafactory. "Tesla has been working hard on researching these niche minerals markets and which raw materials to secure and with what type of agreements," he explained. When asked whether "bringing suppliers in house" could mean that Tesla may move to buy up metals producers, Moores stated, "there has been no indication Tesla wants to own its own mines or resources, and I don't expect this kind of move this early on." Certainly though, the focus on long-term supply agreements makes sense. "Vertical integration is by far the best way to secure your supply chains if you can do it at the right price. But that's the hardest thing — getting the right price," said Moores. "Many investors feel the new resources of these minerals are overvalued, and that prevents the best resources in the world being purchased. And as soon as Tesla is involved, the price then increases by an order of magnitude. That doesn't make any economic sense for the company." To be sure, critical metals investors will be watching for updates from Dahn and his team next year for innovations in the lithium-ion battery space.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. Related reading: Tesla Batteries Already 'Sold Out' Through Mid-2016 What Does the Tesla Battery Announcement Mean for Lithium, Graphite and Cobalt? Elon Musk Unveils Tesla Energy What Does Tesla's New Battery Research Partnership Mean for Graphite, Lithium and Cobalt? from Cobalt Investing News