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Tesla’s years of battery tech investments are becoming a buffer against nickel’s rising costs

Credit: Tesla Inc.

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For years, Tesla has invested heavily in its supply chain and battery strategy. So focused was the company in these endeavors that it even decided to design and produce its own batteries, the 4680 cells. The next-generation cells are a crucial component of Tesla’s long-term plan to make electric vehicles more affordable.

Elon Musk has been very open about Tesla’s need for nickel. Being a key component of its high-performance batteries, Musk stated back in 2020 that any company that can provide Tesla with environmentally-friendly nickel would be granted with a massive contract. During Battery Day, the CEO also highlighted that Tesla’s nickel-based 4680 batteries would be the heart of the company’s flagship products, like the Cybertruck. 

But while nickel is a critical ingredient of lithium-ion batteries, experts have predicted an upcoming shortage for some time. Norway-based energy analytics firm Rystad Energy estimated that demand would surpass nickel supply around 2024, and by 2026, there might be a shortage of the material. This timeframe seems to have been accelerated by Russia’s invasion of Ukraine. 

It should be noted that Russia controls 20% of the supply of the industry’s highest-grade nickel. The country also holds 10% of the world’s overall nickel supply. Thus, when Russia was hit by sanctions due to its invasion of Ukraine, the markets reacted. Nickel prices rose so much that the London Metal Exchange canceled trading for the material for more than a week. In a statement to Insider, auto industry analyst Lauren Fix noted that Russia’s control of nickel could have adverse effects for electric vehicle makers. 

“Relying on your enemies to supply you with critical materials is never to your benefit. They have the ability to control the price you pay and can make it more difficult for you to gain supply to meet your goals,” Fix said. 

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Tesla is the market’s dominant electric vehicle maker, and for good reason. For years, the company has initiated plans to be as immune as possible from market shifts. Tesla built up a nickel supply practically independent of many market shifts by tapping into partnerships with nickel-mining companies and nickel production entities. The company even bought into a nickel mine in early 2021, providing itself with direct access to the material. 

Tesla has also worked heavily in its battery technology, from the 2170 cells currently being made in Gigafactory Nevada with Panasonic to the 4680 cells that are currently being ramped in the company’s Kato Road facility. Tesla’s 4680 batteries were announced as nickel-based cells, though they feature a number of efficiencies that make their production more cost-effective and their life cycle longer compared to traditional batteries. 

Interestingly enough, Tesla is not keeping its 4680 battery technology all for itself. In a previous announcement, Panasonic has confirmed that it would also be producing 4680 batteries, and they have already been validated by the electric vehicle maker. Panasonic has noted that mass production of the next-generation cells would begin around 2024

Tesla also managed to handle the rising cost of nickel by using batteries that do not use the material at all. As per CEO Elon Musk, Tesla has started focusing on using iron-based batteries for its entry-level vehicles like the Model 3 RWD and the Model Y RWD, both of which are produced in Gigafactory Shanghai. The company has also mentioned that it had begun using manganese for some of its batteries to help reduce its reliance on nickel. Lastly, Tesla also launched a recycling program for its nickel-based batteries, which should help the company’s supply chain further in the future. 

Tesla is still affected by shifts in the market. The fact that the company has raised its vehicle prices twice in recent weeks is proof of that. However, a number of experts have stated that Tesla’s forward-looking strategy still makes the company well-positioned to continue in its role as the undisputed leader in the electric vehicle industry. Tien Wong, a tech investor and the founder of Connectpreneur, shared his thoughts on the matter. 

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“Prewar, nickel prices, and potential shortages were a huge concern of Elon’s and the EV industry as a whole. The war will exacerbate these dynamics, which will result in higher prices and slower deliveries for EVs. As for Tesla, they are the market leader right now, so the nickel situation may actually help them versus competitors in the short run,” Wong said. 

*Quotes courtesy of Insider.

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Tesla reportedly places large order for robot parts, hinting that Optimus V3 design is all but finalized

Tesla has reportedly placed a large order of linear actuators for humanoid robots from a Chinese supplier.

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Credit: Tesla

Tesla might have all but finalized the design for its Optimus V3 humanoid robot, at least if rumors from China prove accurate. As per recent reports, Tesla has reportedly placed a large order of linear actuators for humanoid robots from a Chinese supplier, with deliveries expected sometime in the first quarter of 2026.

The volume of orders suggested by the reports from China suggests that the components will not just be used for Optimus prototypes.

The rumor

As noted in a report from Sina News, media outlets across China have recently reported that Tesla has placed a $685 million (5 billion RMB) order for linear actuators from Sanhua Intelligent Controls. The components will reportedly be used for the production of Optimus, which will likely be mass-produced in its V3 iteration. The reports claimed that the delivery of the actuators will likely start sometime in the first quarter of 2026. 

Industry watchers have estimated that such a volume would be enough for about 180,000 Optimus robots. This suggests that while Tesla might not be able to start the initial production of its humanoid robots this year, the electric vehicle maker might be able to hit the ground running with its Optimus production next year. And as hinted at by Elon Musk’s comments on X, Tesla seems to be preparing to produce Optimus V3 en masse.

Company comments

The reports of Tesla’s alleged actuator orders have resulted in Sanhua Intelligent Controls’ stock rising. Interestingly enough, a Tesla China representative has stated that “no official information about this order that could be disseminated externally.” A representative from Sanhua, on the other hand, simply stated that the company’s robotics business is progressing smoothly, but they could not comment on market rumors. 

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While these reports are rumors for now, there are some optimistic hints that Tesla might have all but finalized the design for Optimus V3, and the company might be looking to start the robot’s production. For one, Sanhua is already a Tesla supplier, providing components for the company’s electric cars. A report from The Information also alleged that Tesla is no longer looking to produce 5,000 Optimus robots in 2025. This was reportedly due to challenges in the robot’s hands.

If Tesla is really starting to order large volumes of components for Optimus’ production, it would suggest that the company might have overcome the challenges it was facing with the humanoid robot earlier this year. It would then not be farfetched if Tesla were able to start the initial production of Optimus V3 next year.

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Tesla eyes two new states for Robotaxi

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Credit: @TerrapinTerpene/X

Tesla has officially shown that it is eyeing two new states for Robotaxi operation in the U.S., as it hopes to add the new areas to its ever-growing list of places where the suite is either active or in the testing phase.

Tesla first launched its Robotaxi suite in Austin, Texas, in late June. It expanded the suite to the San Francisco Bay Area just a month later. Since then, it has not launched any public rides in any other states, but it has gained several approvals for early testing.

Tesla officially launches Robotaxi service with no driver

In preparation for operation in new states, Tesla routinely lists job postings on its Careers website, which helps align potential employees with opportunities ahead of regulatory approvals. This is a strategy that allows Tesla to start operations immediately upon licensing for testing.

Tesla started hiring Vehicle Operators for Autopilot in Arizona and Nevada months before the company gained any sort of approvals from state governments for Robotaxi. However, those approvals eventually came in the form of testing licenses, which allow the company to perform validation ahead of its public launch.

Tesla begins validating Robotaxi in a new area, hinting at expansion

Now, Tesla has posted job listings for Vehicle Operators for Autopilot in two new states: Colorado and Illinois. The Colorado job listing is located in Aurora, a suburb of Denver. Tesla is looking for Robotaxi operators in Chicago as well.

These postings hint toward Tesla’s continuing efforts to expand Robotaxi to new places. Earlier this year, CEO Elon Musk said the company would like to have Robotaxi available to at least half of the U.S. population.

It has expanded significantly since its initial launch in late June, but it is still a far way off from where Tesla would like it to be by year’s end.

So far, Tesla has job listings for Autopilot Vehicle Operators in Arizona, California, Texas, Florida, Colorado, Nevada, and Illinois.

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Tesla launched an ad for Elon Musk’s pay package on Paramount+

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Credit: Tesla

Tesla’s advertising strategy has taken a drastic turn as the company’s upcoming Shareholder Meeting will feature perhaps the most crucial vote in its history: the approval of CEO Elon Musk’s new pay package.

For years, the issue of Tesla’s advertising and marketing strategy has been a major point of conversation for investors in fans. It seems to be split right down the middle, with half wanting Tesla to set aside some money for advertising. The other half, just the opposite.

Tesla has been transparent that the money it would spend on advertising, marketing, and public relations is better set aside for the development of future products.

However, it has recently adopted a different tone in advertising, pushing some commercials on social media platforms like X and Instagram.

For the first time, an ad was seen on streaming services like Paramount+, but it wasn’t promoting Tesla’s products directly. Instead, it was more of a message for shareholders to vote on Musk’s pay package, something Tesla feels is a necessity:

“The future of Tesla is in your hands,” the ad reads at the end. It seems as if Tesla is taking whatever steps it needs to accomplish the task of getting Musk a new pay package and retaining him as its CEO.

On September 5, Tesla officially outlined its plans for a CEO Performance Award for Musk. It would require him to lift Tesla’s market capitalization to about $8.5 trillion, up from the $1.36 trillion it sits at today.

Elon Musk’s new pay plan ties trillionaire status to Tesla’s $8.5 trillion valuation

It is obvious that Tesla is really hoping to get the pay package passed and is willing to shift some of its budget to encourage shareholders to vote.

However, there are some interesting perspectives on the move, and it’s sort of strange to see Tesla not advertising its vehicles or products, but only its pay package that would get its CEO paid.

Some of those who saw the ad are questioning the strategy:

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