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Tesla Stock Has a Secret Key to Winning the EV Race in 2022

InvestorPlace ·  01/13/2022 03:16

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

It's well established that winning the electric vehicle (EV) race in 2022 is going to come down to one thing. Battery production has posed constraints to EV producers for years. As companies take significant steps to pull ahead of their competitors, though, the need to streamline battery production has become increasingly apparent. No one knows this better than Tesla (NASDAQ:TSLA). The EV giant is taking plenty of steps to maintain its place at the front of the EV race. Today, Tesla stock is in the green amid news regarding a new mining partnership.

Source: Khairil Azhar Junos/

What's Happening With Tesla Stock

The first week of 2022 proved turbulent for Tesla stock, which began by shooting up but then promptly declined. However, it's been rising since yesterday and is still in the green today. As of this writing, it is up more than 3% for the day, demonstrating a pattern of mostly consistent growth. These gains have the stock up 2.5% for the week and 14% for the month. These numbers are promising, especially when we consider where Tesla stock was last week.

Tesla isn't the only stock starting with T that's been rising this week. Yesterday saw the company announce that it had reached an agreement with Minnesota-based nickel mine Talon Metals (OTCMKTS:TLOFF). TLOFF stock has also been rising since the news broke that it would be supplying the EV giant with nickel concentrate. Shares spiked yesterday, and as of this writing, they are up 2% for the day and 28% for the week.

The Road Ahead

It's hard not to notice when an industry leader makes a deal with a company that trades at penny-stock level. This deal is important, though, not so much because it boosted share prices today but because of what it represents. The ability of a company to acquire the metals needed for EV battery production is going to be of paramount importance in 2022 and beyond. Tesla has made it a priority. In late 2021, it inked a deal with Australian graphite miner Syrah Resources (OTCMKTS:SYAAF). Each new deal that Tesla secures on the material front further demonstrates that it is better positioned to dominate the market due to its size.

InvestorPlace Markets Analyst Joanna Makris echoes this notion, citing the power afforded to Tesla by its unit volume and revenue size. "Phosphate is the other important mineral needed for battery production," she notes. Makris adds that Elon Musk will need alternative sources of phosphate due to China's halting of the material as an export. For this reason, she expects development-stage phosphate miner Arianne Phosphate (OTCMKTS:DRRSF) to soar in 2022.

Musk may well turn his attention to finding a phosphate supplier next. Tesla has secured strategic partnerships with graphite and nickel miners in less than one month. Both deals have helped boost Tesla stock, as investors know that the company is making advances toward the front of the EV race.

The Bottom Line

The EV battery industry has become a race of its own. Companies are scrambling to corner the market and secure partnerships with rare material producers. These past few weeks have shown us that Tesla has the upper hand over its small competitors. Given the company's size, this means every other EV producer.

If you need further evidence of the material frenzy, France is planning to invest more than $1 billion in the safeguarding of the raw metals needed for EV battery production. Other countries are likely to follow suit. Tesla has taken the type of action now that will pay off down the road.

On the date of publication, Samuel O'Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

The post Tesla Stock Has a Secret Key to Winning the EV Race in 2022 appeared first on InvestorPlace.

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