Question
Tesla's unique process of lithium battery recycling contributes to its risk management strategy by ensuring a consistent supply of raw materials needed for the production of its electric vehicles (EVs). By recycling about 92% of battery cell materials, Tesla reduces its dependency on external suppliers and mitigates the risk of supply chain disruptions. This strategy also helps Tesla to stay competitive in the market, as it can continue its operations even when competitors are securing the same resources.
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For example, with all these new competitors, Tesla now has to prove to its stakeholders it has a strong mitigation plan. Part of Tesla's risk mitigation plan is to invest in the raw materials needed to mass-produce EVs. In 2020, Tesla signed a new deal with mining giant Glencore to secure its nickel and cobalt supplies over the next few years. But Tesla competitors Stellantis and Renault are now doing the same with lithium. So how does Tesla continue to mitigate risks? Lithium battery recycling. While Tesla used third party lithium recyclers for years, the company invested in its own plans to recycle about 92% of battery cell materials with its own unique process.
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