Both plane makers say they have enough titanium supplies – for now. But it’s not just a question of whether they have enough supply, or even of whether they can find alternative suppliers. It’s also a matter of who they turn to. Japan, the world’s second biggest titanium producer, is ramping up output. Yet the world’s largest titanium player, with a 57 percent share of global production, is China. And turning away from Russia hardly makes sense if it means increasing reliance on China: What happens if the F-35 becomes dependent on Chinese titanium?
Elon Musk has had plenty of press attention this week. But very little of it for what could be one of his most consequential recent moves. As lithium carbonate prices soar – to the tune of nearly 500% in the past year – EV makers like Tesla and Nio are raising prices to compensate for lower profit margins. Now, Tesla is signaling it might want to take matters into its own hands, and via at least a semblance of vertical, upstream integration: Musk tweeted last weekend that “Tesla might actually have to get into the mining & refining directly at scale, unless costs improve.” With raw materials now accounting for 80% of the cost of a lithium battery, up from 40% in 2015, Musk is decidedly onto something. That said, investment in upstream assets, including mining assets, is decidedly not the norm for US players. And while this Tweet might be more Musk bravado than action, it signals a real change in how major US companies think about their relationship to upstream supply. That change is clearly driven by the dawning, inescapable reality that in today’s industrial landscape, material batters: Over the past decade, cobalt prices have increased by 3x and lithium prices by a whopping 28x. Car companies simply can’t afford to rely on outsourced supply. Regardless, Tesla’s news was not particularly well received by investors in Chinese lithium miners. Ganfeng Lithium, which has a contract to supply Tesla with lithium products through 2024, slumped as much as 15% on Monday following Musk’s tweet.