Tokyo-based publication Nikkei Asia collaborated with AI solutions provider Fronteo to conduct an analysis of Tesla’s supply chain by gathering publicly-available data through a machine-learning algorithm.
Interestingly, the analysis suggests that Chinese companies accounted for almost 40% of the American automaker’s battery supply chain.
Analysis highlights
The gathered information from widely accessible financial statements and press releases suggested that 13,428 firms worldwide supply Tesla’s electric vehicle production. Notably, it indicates “quinary” suppliers” five steps up in the automaker’s overall supply chain network.
Of that total, 61 companies are involved in Tesla’s “storage battery” supplier category, with Chinese firms accounting for 39%. These China-based suppliers include the following:
- Lithium products maker Ganfeng Lithium
- Inorganic compounds producer Novoray
- Cobalt producer Zhejiang Huayou Cobalt
It is worth noting that the State owns a 9% share in Novoray and 12% in Huayou Cobalt, which indicates the government’s strong support for these kinds of businesses.
The analysis also revealed that US firms contributed 22% of the Musk-led automaker’s overall suppliers beyond battery materials. On the other hand, China only held a 17% share in the overall segment.
Fronteo director Mari Yamamoto warned that Tesla might hit some barriers due to its heavy reliance on China for its battery supplies. Fortunately, the American automaker has already been reducing its dependence on China for its battery-related supplies. For instance, it is already developing its own lithium refinery in Texas. It is also reportedly planning to establish a mining site in Ontario.
See Also:
- Tesla dominates Cars.com’s 2023 American-Made Index, landing top 4 spots
- Tesla battery suppliers enjoy shares growth amidst IRA tax credits
- Tesla’s 4680-type battery cell hits 10 million unit production mark at Giga Texas
- Tesla gears up for 4680 battery cell production ramp-up in California
- Tesla submits an application to expand battery production facility at Fremont
Notably, Tesla’s S3XY lineup is acknowledged as the most American-made vehicle today. That said, it must reduce its dependence on Chinese companies for its electric vehicle production, particularly for its batteries. It must retain this title to secure its access to government subsidies, particularly the federal tax credit of up to $7,500.
