A relative newcomer to the automotive sector, Tesla, Inc. (Nasdaq: TSLA), has made a name for itself in the electric vehicle (EV) world. Headquartered in California, this electric vehicle manufacturer and energy storage company is quickly becoming a household brand. Tesla initially received a lot of attention when it produced the first electric sports car, the Roadster. This was followed by the Luxury Model S. Both were boosted by Tesla's charismatic CEO, Elon Musk.
The Roadster was the first electric car to use lithium-ion batteries. It was also the first to have a cruising range of over 200 miles. The limited cruising range between charges has been one of the major criticisms of electric cars. Most gasoline-powered vehicles have a cruising range of around 350 miles.
Concerned about competitors either obtaining inside information or buying out necessary parts, Tesla is secretive about its many suppliers. Nonetheless, some have been uncovered by diligent researchers. Tesla manufactures the basic electric components of the car, including the electric motor, the battery pack, and the charger. It also aims to make its own batteries and microchips. Essential components that it needs come from Tesla suppliers spread across the U.S., Europe, and Asia.
- Tesla Motors has become known for producing well-designed and innovative electric vehicles.
- To assemble its cars, Tesla sources parts from a range of Tesla suppliers.
- Some suppliers provide ordinary car parts, others provide electric vehicle parts. Still, others provide steel, industrial products, and minerals.
- The transition to EVs is moving at a rapid pace and EV suppliers have room to grow.
- As the EV market develops, Tesla suppliers may offer worthwhile investment opportunities.
Key Tesla Suppliers
Below are some purported key suppliers for Tesla's manufacturing production, along with the components they supply:
- BHP: nickel
- Ganfeng Lithium Co.: lithium
- Glencore: cobalt
- Modine Manufacturing Co.: battery chiller
- Rohm And Haas Company: specialty materials
Other Alleged Tesla Suppliers
- ABC Group
- Affinia Group Intermediate Holdings Inc.
- Burlington Northern Sante Fe Corp.
- Clarcor, Inc.
- Cooper Industries, Ltd.
- Dana Corporation
- Danaher Corp.
- Delphi Corporation
- Emerson Electric
- Flowserve Corp.
- Garmin Ltd.
- Harman International Industries Inc.
- Hitachi Cable America
- Hope Global
- Lightwave Logic, Inc.
- Lithium Exploration Group, Inc.
- Magna International
- Metaldyne Performance Group Inc.
- Methode Electronics
- Molex Inc.
- NextEra Energy, Inc.
- Niocorp Developments, Ltd.
- Nortek, Inc.
- Nucor Corporation
- PSM International
- Rare Element Resources, Ltd.
- Searchlight Minerals Corp.
- T1 Automotive
- TXU Corp.
- Universal Logistics Holdings, Inc.
- U.S. Lithium Exploration Group, Inc.
- Zanini Auto Group
Still, more rumored suppliers:
- Aaon Inc.
- Amerityre Corp.
- Applied Optoelectronics Inc.
- Arc Group Worldwide
- Avid Technology Inc.
- Bel Fuse Inc.
- CDTi Advanced Materials
- CECO Environmental Corp.
- China Automotive Systems Inc.
- Core Molding Technologies Inc.
- CUI Global Inc.
- CSW Industrials Inc.
- CTS Corp.
- Curaegis Technologies, Inc.
- Deswell Industries Inc.
- DMC Global Inc.
- Emcore Corp.
- Findex Com Inc.
- Gorman Rupp Co.
- Hammer Fiber Optics Holdings Corp.
- Handy & Harman Ltd.
- Harmonic Inc.
- Haynes International Inc.
- IEH Corporation
- Integrys Holding, Inc.
- Jason Industries Inc.
- KMG Chemicals Inc.
- Liquidmetal Technologies Inc.
- NeoPhotonics Corp.
- NI Industries Inc.
- Omnitek Engineering Corp.
- Pam Transportation Services Inc.
- Paragon Offshore PLC
- Perma-pipe International Holdings Inc.
- Proto Labs Inc.
- Puradyn Filter Technologies Inc.
- Seachange International Inc.
- Sense Technologies Inc.
- Strattec Security Corp.
- Supreme Industries Inc.
- Telkonet Inc.
- THT Heat Transfer Technology Inc.
- Titanium Metals Corp.
- Thomas & Betts Corporation
- Trecora Resources
- UFP Technologies Inc.
- Universal Stainless & Alloy Products Inc.
- Voxx International Corporation
- Vystar Corp.
- Zoom Telephonics Inc.
Are Supplier Stocks a Better Way to Invest?
Investors watching the EV market might do well to consider EV suppliers as well as EV makers. Major car companies continue to confirm their commitment to producing EVs. That bodes well for providers of EV components and the potential investor benefits:
- Diversification: Manage risk by spreading investments among various suppliers and makers in the EV sector.
- Value: If an EV maker is overvalued, Tesla suppliers' stocks may offer a smart investment alternative.
- Performance: The continued transition to EVs plus favorable government regulations and incentives can mean increased consumer demand, more EVs produced, and growth in the need for EV suppliers' products.
While supplier competition will likely intensify given the opportunities in the EV market, there's also the potential for stars to emerge and reward investors.
Who Is Tesla's Biggest Supplier?
Some of Tesla's suppliers with substantial market capitalizations include Emerson Electric, Garmin Ltd., Danaher Corporation, and Nucor Corp.
Who Are Tesla's Battery Suppliers?
Tesla has plans to make its own batteries. A large supplier of the lithium required for these batteries is China's Ganfeng Lithium Co. Ltd. Australian mining company BHP supplies needed nickel. Anglo-Swiss company Glencore provides cobalt. All three are Tesla suppliers.
Does Tesla Make Its Own Microchips?
Yes, it does. To reduce its dependence on chipmakers, avoid order bottlenecks, and improve energy efficiency, Tesla has pursued the manufacture of its own semi-conductors made from silicon carbide. Silicon carbide is more durable and energy-efficient than the standard, mass-produced silicon wafer.