5 Ways To Invest in the Tesla Ecosystem and Maximize Your Returns
Written by
Tobi Opeyemi Amure
Edited by
Zuri Anderson
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Tesla has become one of the most recognized names in the electric vehicle (EV) industry, but its reach goes far beyond just cars. The company relies on a vast network of suppliers and partners to build its vehicles, energy products, and battery systems. Investing in Tesla stock is one option, but there are other ways to benefit from the company’s rapid growth and innovation.Â
Looking into the companies that supply Tesla with key components and raw materials, there are opportunities for investors to diversify their portfolios, tapping into the broader EV ecosystem. These suppliers often offer unique opportunities for growth, sometimes with less volatility than Tesla’s own stock.
Here are five ways to invest in the Tesla ecosystem and maximize your returns, focusing on companies that play a crucial role in Tesla’s supply chain.
Invest in Lithium Producers Supplying Tesla
Lithium is a critical component in the batteries that power Tesla’s electric vehicles and energy storage products. Several major lithium producers have signed supply contracts with Tesla, making them attractive options for investors. According to Nasdaq, Ganfeng Lithium powers Tesla’s vehicles and energy storage products, making lithium producers central to the company’s success.
Arcadium Lithium, which is set to be acquired by Rio Tinto, also has supply deals with Tesla, offering another route for exposure to the lithium market. Liontown Resources started shipping lithium spodumene concentrate to Tesla in 2024, and Piedmont Lithium supplies spodumene concentrate from its North American operation. These companies are directly tied to Tesla’s battery production, and as demand for electric vehicles increases, their growth prospects look strong.
Consider Battery Manufacturers Partnering With Tesla
Tesla’s battery technology is central to its success. According to Investing News Network, the company still relies on several major battery manufacturers to meet its needs. Panasonic has been a longtime partner, co-owning and operating the Nevada Gigafactory with Tesla, and continues to supply battery cells for Tesla’s vehicles. LG Energy Solutions, the world’s second-largest battery supplier, also provides cells containing nickel and cobalt for Tesla’s cars.
Since 2020, CATL has supplied lithium iron phosphate (LFP) batteries for Tesla’s Shanghai facility, covering 80% of China’s battery energy storage system manufacturing. BYD, another Chinese battery giant, is supplying Tesla with its Blade battery for some models in Europe and is also involved in energy storage projects. Investing in these battery makers allows investors to benefit from the global shift toward electric vehicles and renewable energy.
Explore Industrial and Manufacturing Partners
Tesla’s supply chain includes companies that provide essential industrial products, machinery and specialty materials. Emerson Electric and Danaher Corporation are two large-cap companies that supply industrial products and automation solutions used in Tesla’s manufacturing process. Nucor Corp, a major steel producer, supplies steel for Tesla’s vehicles and Gigafactories, making it a key partner in Tesla’s expansion plans.Â
These companies benefit from Tesla’s growth but also serve a wide range of industries, which can help reduce risk for investors. As Tesla continues to scale up production and build new factories, demand for industrial automation, steel and specialty materials is likely to increase, supporting the growth of these suppliers.
Look at Raw Materials Suppliers in the Tesla Ecosystem
Beyond lithium, Tesla’s batteries require other important raw materials like nickel and cobalt. BHP, an Australian mining company, supplies nickel to Tesla, which is essential for high-energy-density battery cells. According to SME Mining Engineering, an Anglo-Swiss mining company known as Glencore, also provides cobalt to Tesla.Â
These companies are not only significant suppliers to Tesla but also have diversified operations in other metals and minerals, offering stability and growth potential. As the electric vehicle market expands, demand for nickel and cobalt is expected to rise, potentially boosting the fortunes of these mining giants. Investors interested in commodities can gain exposure to the EV revolution by considering these suppliers.
Diversify With Riskier or Emerging Suppliers
While established suppliers offer stability, some smaller or emerging companies in Tesla’s ecosystem present higher risk but also higher potential rewards.
Modine Manufacturing supplies battery chillers for Tesla’s vehicles, a niche but important component in electric vehicle performance. Rohm and Haas Company provides specialty materials used in Tesla’s battery and vehicle manufacturing. Sichuan Yahua Industrial Group, a Chinese chemical company, has a long-term agreement to supply battery-grade lithium hydroxide and carbonate to Tesla through 2030.
These companies may not have the same scale as the giants, but they are closely tied to Tesla’s innovation and expansion. Investors seeking growth opportunities might consider these riskier suppliers, keeping in mind the potential for both higher returns and increased volatility.
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