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BHP Nickel West. Image: BHP.

Tesla chief executive Elon Musk is pushing miners to produce more nickel as an ingredient of lithium-ion batteries used in its electronic vehicles (EVs) with the incentive of a “giant” contract.

Musk said in a second-quarter earnings call that a “giant contract for a long period of time” would be provided to a miner able to extract zinc in a sustainable and environmentally friendly way.

The high cost of EV batteries remains one of the main roadblocks in Tesla’s growth, according to Musk.

“The real limitation on Tesla growth is cell production at an affordable price. That’s the real limit,” he said.

Tesla is set to increase its business with its battery partners, including Panasonic in Japan and Contemporary Amperex Technology (CATL) in China.

The car maker’s batteries are made from nickel, cobalt and aluminium, but the company has been distancing itself from using cobalt since January last year due to unethical mining practices in Africa along with cost concerns.

However, Tesla signed a deal with Glencore to receive cobalt from its mines in the Democratic Republic of the Congo and manufacture batteries at its Berlin “Gigafactory” in June.

Nickel’s use in battery cells allows them to be energy dense, resulting in lighter and more compact batteries with a higher capacity.

Musk said Tesla would make further announcements about the company’s batteries at its “Battery Day” event in September.