In a recent analysis of publicly-available information regarding Tesla's supply chain, an intriguing discovery has come to light. It has been reported that nearly 40% of the suppliers providing materials for the company's batteries are Chinese entities. This insightful analysis was a collaborative effort between Nikkei Asia and Tokyo's Fronteo, utilizing a sophisticated machine-learning algorithm to sift through data.
The joint analysis meticulously reviewed financial statements and press releases, identifying a staggering 13,428 companies believed to contribute components to Tesla's electric vehicle production, even encompassing suppliers situated five steps up the supply chain, known as "quinary" suppliers.
Remarkably, the spotlight falls on China as the primary supplier of materials for the lithium-ion batteries powering Tesla's electric vehicles. Of the 61 companies listed under the EV manufacturer's "storage battery" category, an impressive 39% are Chinese enterprises. Among these, prominent players like Ganfeng Lithium, known for its lithium products, Novoray, specializing in inorganic compounds, and Zhejiang Huayou Cobalt, a cobalt producer, take center stage. Worth noting is the Chinese government's involvement in Novoray and Huayou Cobalt, holding stakes of 9% and 12%, respectively.
Despite China's significant role in Tesla's battery supply, the analysis by Nikkei Asia and Fronteo unveils that American companies contribute 22% of Tesla's overall suppliers. On a broader scale, Chinese firms make up just 17% of Tesla's supplier base.
There are, however, discernible risks tied to Tesla's reliance on Chinese suppliers within its battery supply chain. Notably, Tesla has signaled its intentions to reduce this dependency through various measures. A noteworthy example is Tesla's investment in a dedicated lithium refinery in Texas, underlining the company's commitment to diversify its supply chain sources.
It's worth mentioning that Tesla's electric vehicles, particularly the Model Y crossover and the Model 3 sedan, are acclaimed as some of the most American-made vehicles today. Reflecting this, the 2023 American-made Index by Cars.com ranks the Model Y as the top vehicle, followed by the Model 3 in 2nd place, the Model X SUV in 3rd place, and the Model S sedan in 4th place. This accolade underscores Tesla's dual identity as both a global player in the EV market and a cornerstone of American manufacturing prowess.
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