Blackstone Resources comments on TESLA'S Battery strategy

Blackstone Resources AG (SWX: BLS) Blackstone Resources AG CEO Ulrich Ernst comments today about Blackstone Resources vision and strategy and which has been confirmed by the newly released Tesla’s battery plans of Elon Musk.

Thoughts on Tesla's plans to make its own batteries

Elon Musk has acknowledged the importance of both having access to the next generation of battery technology and the raw materials needed to produce these batteries. The demand for electric cars is likely to quickly outstrip the amount of battery materials that these vehicles require, even with new technologies which aim to reduce the amount to of battery materials needed. What we saw on that day was a lag between what Tesla would like to achieve and what battery technology currently permits.

This constraint could limit the growth of the EV market if not dealt with and this would have a negative knock-on effect on Tesla. By contrast, it will also reward companies that are involved in either producing the next generation of batteries or supplying the materials needed to make them. Tesla hinted on the day that its vision was to become more vertically integrated and have better control over its supply chains in the future and might even invest in producing battery metals such as lithium.

This is exactly what Blackstone Resources strategy is and has been pursued for the last five years. In fact, the company has built it business model to accommodate this exact type of market once it emerges.

We believe that the key to being successful in the battery market is to have a presence from the battery metal to the battery cell.

Blackstone Resources started as a business by building a diversify portfolio of battery metal mining interests that covered both exploration and production projects. Two years ago, the company also launched its battery technology division and set up a subsidiary Blackstone Technology GmbH with its new 6000m2 facility in Saxony, Germany to gain access to where auto manufactures are based.

Blackstone Resources is therefore one of the first vertically integrated battery company in the world.

Tesla needs to improve the battery technology it currently uses in its vehicles

There is now a huge range of different competing companies vying to bring to market the next generation of battery technology. These companies are likely to beat Tesla when it comes to providing the next generation of technologies, which includes solid-state batteries and new advanced manufacturing techniques. This should be an issue for Tesla, which has significant access to capital and could quickly get up to speed through a targeted acquisition.

At Blackstone Resources we have already developed and tested our 3 D printed batteries that offer a significant improvement in terms of battery density, recharge cycles and costs. Furthermore, we have also developed a technology to mass-produce these batteries in 2021 in any shape or form using our own proprietary battery printing technology.

Battery metals will remain an essential component for the foreseeable future

Elon Musk believes that the next generation of batteries will use significantly less battery metals, such as cobalt but much more of nickel and lithium and so on. In reality, demand for these metals is likely to pick up significantly if Tesla and other auto manufactures want to realistically electrify their vehicle fleets.

While it is true that better battery technology can save battery metals significantly but the increase in demand will need more cobalt, nickel, manganese, graphite and lithium since the sheer demand for new electric vehicles will still vastly outstrip supply. The reason is that now large auto manufacturers are also starting to roll out their first electric vehicles and many have plans to completely electrify their entire range of cars. There will be for sure bottle necks and metal price increases.

Blackstone is aligned with Tesla on their vision

Despite the differences that we have with Tesla and its view of the world, Blackstone Resources shares much of its vision. Tesla's acknowledgement that supply chain risk poses a threat to its business model is a clear indication on the foresight Blackstone Resources had in building a vertically integrated battery company. It is Blackstone who started this vision years ago.

Overall, we are glad to see the progress that Tesla as a company has made. For us, it is an indication of what is to come, which will benefit Blackstone Resources. We look forward therefore, to the future developments that are on their way.

About Blackstone Resources AG

Blackstone Resources AG is a Swiss Holding Company, with its legal domicile in Baar, Kanton Zug, and is concentrating on the battery technology and battery metals market. In addition, it sets up, develops and manages refineries used for gold and battery metals. It offers direct exposure to the battery technology and battery metals revolution that is being driven by the demand of electric vehicles that need vast quantities of these metals. These include cobalt, manganese, graphite, nickel, copper and lithium. In addition, Blackstone Resources has started a research program on new battery technologies on solid state batteries and its production process.

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