Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk tweeted that he plans to work on an environmental impact blog post this weekend to disprove an article which appeared in Bloomberg Businessweek today. Musk calls the article “BS” and “beyond ridiculous.”
Tesla’s Musk takes on the media… again
Musk has been anything but shy about addressing things in the media which either aren’t right or are misunderstood. In fact, some would say he’s a PR nightmare because he doesn’t seem to have an internal filter. But anyway, it will be very interesting to see what he has to say in his post. It will probably be a good one. If the Bloomberg article is incorrect, then it needs to be disproven.
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His promise of a post explaining away Bloomberg’s article comes the same day he accused New Jersey Gov. Chris Christie of making a “backroom deal” regarding legislation which banned Tesla’s from being sold in the state.
What Bloomberg has to say about Tesla and graphite
The issue raised in the article has to do with the graphite mines in China. Tesla Motors Inc (NASDAQ:TSLA)’s batteries use graphite, as do the Plug-in Prius hybrid made by Toyota and a number of electronic cars. The batteries in Apple Inc. (NASDAQ:AAPL)’s iPhones and other electronic devices also use graphite.
Unfortunately, China’s graphite mines have been linked with the major pollution problems the nation has been battling for some time. As a result, China has been shutting down graphite mines and processors, thus cutting down on the commodity, just as demand for it is rapidly rising.
Tesla’s gigafactory could strain supply
In order to battle the battery supply constraints Tesla Motors Inc (NASDAQ:TSLA) has been dealing with, the automaker is planning to build a gigafactory. Experts interviewed by Bloomberg estimate that the factory could double the demand for graphite, which would mean six new minutes would have to open up. However, the opposite is happening, with up to 55 graphite operations being suspended in Shangdong province. That area alone controls 10% of the global graphite supply. Many expect that the Chinese government could close even more mines.
However, Australia’s Uley graphite mine is scheduled to reopen this month. The mind had been closed for over 20 years because China’s mines caused reduced graphite prices.
Other problems in China
Processing graphite into its usable form also causes pollution in the form of waste water, according to Bloomberg. Mines use hydrochloric acid to process the graphite, and if mines are poorly managed, the waste water gets into the environment where it can harm every form of life.