Tesla and the environmental impact of lithium-ion batteries

Tesla is one of the most important companies addressing climate change with their core products — their fleet of cars and their suite of clean energy technologies. The environmental impact of the massive boom in lithium-ion battery production should be examined and mitigated.

Tesla’s background and focus on climate change

Tesla is one of the most innovative and impactful companies tackling climate change. Tesla’s management clearly made tackling climate change a focus and the company has capitalized on the recent swell in public interest around the topic. As a result, Tesla has performed incredibly well; it has one of the most recognizable brands in the world and its stock price increased tenfold in the last 5 years [1]. More companies can and should follow Tesla’s lead.

Tesla’s original mission statement was to “accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible” [2]. Tesla started with the Roadster in 2008, priced at a nearly unattainable $100,000. Purchased by eco-minded millionaires and celebrities, it gave the brand a high level of appeal such that when the product line expanded to include the Model S, the Model X, and most recently the Model 3, priced at $35,000, pent-up demand was unleashed which led to high volumes of sales [3]. Tesla sold over 76,000 cars in 2016 compared to ~700 Roadsters in 2012 [4]. Tesla’s focus on environmental sustainability, safety, and innovation made their electric cars hugely popular.

In 2016, Tesla acquired Solar City and expanded its product portfolio to include solar panels, solar roof tiles, and battery storage. Batteries complement the generation profile of solar panels that charge only during the day when the sun is shining. Storing electricity for use on cloudy days and at night is necessary in order to provide the on-demand electricity consumers are accustomed to. Solar and battery storage are useful not only in the developed world. Elon Musk believes that when it comes to emerging markets, coupling solar and battery storage means “you can avoid building electricity plants at all”and instead set up self-sustaining micro-grids in small villages that previously had no electricity [5].


Lithium-ion batteries; where Tesla could do more

Lithium-ion batteries play a key role in Tesla’s product portfolio. They power Tesla’s electric cars and are the storage medium for Tesla’s battery storage product, the Powerwall. To produce lithium-ion batteries, Tesla has built a massive manufacturing facility in Reno, NV called the Gigafactory which will dramatically increase the number of lithium-ion batteries on the market. By 2018, the Gigafactory will produce more lithium-ion batteries annually than were produced worldwide in 2013 [6].

While Tesla itself is focused on addressing climate change with its core products, the environmental impact of its lithium-ion batteries should be closely examined and mitigated.

Much of the world’s lithium is extracted from brines beneath the deserts of South America and evaporated using the sun’s energy. However as demand has grown, due in large part to Tesla, more and more lithium is mined in Australia by crushing rock and is then sent to China for processing in a more energy intensive cycle [7]. Mining is a notoriously energy intensive industry and many mines are powered using dirty electricity such as coal.

Once a battery reaches the end of its life, there is recycling and disposal to be considered. Currently, over 90% of lead-acid batteries used in typical gasoline-powered vehicles are recycled. Compare that to less than 5% of lithium-ion batteries. Experts project 11m tonnes of lithium-ion batteries will be discarded between 2017 and 2030 [8]. These batteries will need to be transported to recycling facilities around the world to be processed, further contributing to their negative environmental impact. Transporting batteries from Australia to Europe resulted in an increase of global warming potential of ~45% [9].


Conclusion and considerations

Tesla is leading the way in terms of introducing new clean transportation and clean energy products to market. That said, lithium-ion batteries are a key ingredient in both Tesla’s cars and Powerwalls and currently cause significant environmental harm. Tesla should be thinking ahead to when the first wave of lithium-ion batteries reach end-of-life. It seems as though they are already planning to do onsite recycling of lithium-ion batteries at the Gigafactory, however they should be investing in building additional battery recycling sites so as to reduce transportation costs [10]. Tesla could also work to provide renewable energy at lithium mines, perhaps by installing their own solar panels on-site, to reduce the carbon footprint of extracting lithium in the first place. Lastly, Tesla should publicize its work around battery recycling to inform environmentally-conscious consumers that they are making every effort to ensure lithium-ion batteries will have minimal impact on the environment.


Questions for discussion

What else can Tesla do to reduce the environmental impact of lithium-ion batteries?

Are there other emerging energy storage technologies that have less of an impact on climate change?


Word count: 769



[1] Google Finance [URL], accessed 12 November 2017.

[2] Tesla, Inc., “The Mission of Tesla,” [URL], accessed 12 November 2017.

[3] Tesla, Inc., “Model 3,” [URL], accessed 12 November 2017.

[4] Tesla, Inc., “Tesla Fourth Quarter & Full Year 2016 Update”, accessed 12 November 2017.

[5] Chelsea Gohd, “Elon Musk: 100 Gigafactories Could Power the Entire World”, Futurism, [URL], accessed 12 November 2017.

[6] Chelsea Gohd, “Elon Musk: 100 Gigafactories Could Power the Entire World”, Futurism, [URL], accessed 12 November 2017.

[7] Financial Times, “Electric Car Growth Sparks Environmental Concerns”, [URL], accessed 12 November 2017

[8] Lizzie Wade, “Tesla’s Electric Cars Aren’t as Green as You Might Think”, Wired, [URL], accessed 12 November 2017.

[9] Anna Boyden, “The Environmental Impacts of Recycling Portable Lithium-Ion Batteries”, Research School of Engineering, The Australian National University, 2016.

[10] Amy Westervelt, “Tesla’s new batteries may be harder on the environment than you think”, The Guardian, [URL], accessed 12 November 2017.


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Student comments on Tesla and the environmental impact of lithium-ion batteries

  1. To defend Tesla a little bit in regards to sustainability, they did build the world’s largest solar farm to power the gigafactory (https://www.theverge.com/2017/1/11/14231952/tesla-gigafactory-solar-rooftop-70-megawatt). I would also say that their entire mission is to make the world more sustainable and less reliant on fossil fuels. Given this, I’m a little worried about the cost involved in recycling lithium-ion batteries and more generally any measure that would substantially increase Tesla’s costs. Tesla is already burning through cash and I’m not sure they can do everything perfectly right now or they may go bankrupt. Since their overall mission is so important, I’d rather have them be successful with their products, even if there are a few ways they could improve the sustainability of their process.

    That being said, I am a little surprised that they would not have done more about the impact of lithium-ion batteries. I wonder if this is something they overlooked or whether they decided to prioritize other things. If there is a cost-effective way to minimize the impact of lithium-ion batteries, I would definitely support it.

  2. Great points that you raise. Where I am having difficulty thinking about this issue is whether Tesla is responsible for the entire lifecycle of the battery. While I agree it would be great if they made recycling factories, I wonder how much business sense reusing those batteries makes.

    According to this article, the batteries preferred by Tesla may not have great second-life characteristics (bad cycling damage and wrong type for stationary applications). But with more lithium ion batteries in circulation, the upside for figuring out better recycling techniques will grow. [1]

    [1] https://www.energy-storage.news/blogs/recycle-vs-reuse-why-ev-batteries-may-not-often-get-a-second-life-as-statio

  3. I agree with the writer that Lithium Ion mining can pose significant environmental impact- especially when pumping back water that is contaminated with toxic chemicals into the ground after evaporating the Lithium/ rare earth metals [1]. In order to assess accurately the extent of environmental damage, it might be in Tesla’s interest to perform a lifecycle analysis for Lithium usage and taking a step back for each of it’s cars. In the meantime, Tesla can push a new agenda to their suppliers in utilizing more environmentally safe standards within their mining practices. I also think this is something that is very feasible as technology to create contaminated water is not new, and as financially it is not as intensive as performing other environmental practices.

    [1] https://u.osu.edu/2367group3/environmental-concerns/effects-of-mining-lithium/

  4. Great essay! I do not think it is realistic for Tesla to figure out how to create products with an entire sustainable and green lifecycle. They need to balance their product innovation and roadmap with sustainability efforts like everyone else. At the end of the day, Tesla and Elon musk can not have core competencies on every aspect and subpart of their business. I think they best way they can inspire their supply chain partners is with continued product innovation. Sometimes companies need to see their is a demand for cleaner and more sustainable products and practices. The more Tesla innovates and explicitly shows how it is ahead of the world, and creates the demand for greener products and practices, the more other companies in the supply chain are going to want to innovate and grow as well to provide that service.

  5. I really enjoyed reading this! I agree that Tesla could and should do more to mitigate their environmental impacts as the proliferation of electric vehicles continues. Consumers often fail to think about their purchases from a lifecycle perspective. Many who purchase a Tesla will automatically assume that it’s significantly better for the planet than a regular internal combustion engine vehicle – and they’re probably right. But most don’t stop to think about the impacts of lithium extraction or the source of the electricity powering the vehicle. While I believe that Mr. Musk has his heart in the right place from a sustainability perspective, consumers must also understand the environmental impacts of electric vehicles and pressure corporations like Tesla to constantly reduce their ecological footprints.

  6. What’s the alternative? I think the key question here is how does the environmental impact of producing an electric vehicle (EV), including that of producing lithium batteries, compare to the impact of manufacturing a combustion powered vehicle. For a combustion vehicle, the engine assembly process is one of the most pollutant and energy intensive processes of its manufacturing. Producing lithium-ion batteries instead might have a softer environmental impact. That said, I do agree that Tesla should still be mindful of the sustainability of their lithium battery production. Nice essay!

  7. Tesla is a really helpful example to deep dive into climate change and highlight the side effects that even environmentally-focus companies can have on the environment. Even though no one can argue against Tesla’s mission and positive alignment with reducing climate change, there is room for debating how far should Tesla go to push for further measures to minimize the impact that lithium batteries’ supply chain has on the environment. As the article points out, most of the world’s lithium reserves are located in South America, in the so-called “lithium triangle” made of Argentina, Bolivia and Chile. Chile, as the largest lithium producer among them, has seen a dramatic increase in lithium extraction due to booming demand from Tesla and other electrical car manufacturers. At the same time, the environmental impact that these activities are having on Chile’s hydric sources -such as contamination and droughts- has started to attract public attention. Proposals urging the Government to set stricter legislations to control lithium extraction have already reached the Congress. However, such proposals tend to be scarce and take years to materialize in any developing country, and Chile is not an exception. That said, I do personally believe that Tesla should leverage his purchase power and impose higher standards for its suppliers in developing countries to ensure both the long-term sustainability of lithium supply and to minimize the impact on local communities and environment. By doing that, Tesla would become a role model for the rest of car manufacturers and would fully embrace its mission of accelerating the advent of sustainable transport.

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