TSLA - Tesla: Strategic Battery Strategy

• The auto industry is entering a steep S-curve disruption. Legacy carmakers unable to rapidly transition to BEVs will lose market share and risk collapse and bankruptcy.
• Lithium battery supply chains are expanding to support the BEV transition. But geopolitical instability and inevitable hiccups will mean occasional feedstock shortages even for abundant elements.
• LFP, high nickel and high manganese cathodes differ in sensitivity to feedstock scarcity. A cathode that delivers the most batteries (and cars) under supply constraints can impact an OEM's market share.
• One manganese cathode delivers more kWh than LFP/NMC under supply constraints. Indications are key players will bring this cathode to scale in the near to medium term.

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