Tesla said to have held talks over potential Glencore stake

Tesla reportedly held talks with Glencore about taking a stake in the Swiss commodities group as it looks to secure materials needed for the rollout of electric vehicles.

The Financial Times cited people familiar with the matter as saying that preliminary discussions about Elon Musk’s electric car and battery maker buying a 10% to 20% stake in Glencore began last year. They continued in March this year, when Glencore chief executive Gary Nagle visited Tesla’s factory in Fremont, California as part of a roadshow for the mining company’s annual results.

However, it was understood that the discussions ended with no deal reached. The FT said Tesla had concerns over whether Glencore’s extensive coal mining business was compatible with its environmental goals, and was reluctant to take a minority equity stake.

Glencore is the world’s largest listed trading house and biggest producer of cobalt through its mines in the Democratic Republic of Congo, Australia and Canada. Two years ago, Tesla secured a cobalt offtake agreement with the Swiss group to supply its factories in Shanghai and Berlin.

The FT noted that Musk has previously outlined Tesla’s intention to take greater control of all manufacturing steps of its batteries, including processing the raw materials and even buying lithium deposits still in the ground, if the supply chain fails to deliver.

In April, he tweeted about his concerns over lithium costs. "Tesla might actually have to get into the mining & refining directly at scale, unless costs improve," he said.