Tesla Motors Inc (TSLA) has difficulty tracking conflict minerals in supply chain

Posted Jun 4, 2014

In a Securities and Exchange Commission filing, Tesla Motors Inc (NASDAQ:TSLA) reported that it is having difficulty determine the source for some of its raw materials used in building its electric cars due to the complexity of its global supply chain. Several companies like Tesla Motors and Hewlett-Packard are required to disclosed its efforts to identify the sourcing of its so-called conflict minerals from the Democratic Republic of Congo along with its neighboring countries, according to a section in the Dodd-Frank legislation that was passed several years ago.

?Tesla has not yet been able to fully identify countries of origin of the necessary conflict minerals and smelters and refiners used to process the necessary conflict minerals in Tesla?s products,? said Tesla Motors in a regulatory filing. This was in reference to four minerals used in the manufacturing of electronics and lithium-ion batteries, which are gold, tin, tungsten and tantalum.

Tesla Motors said that its biggest challenge is that suppliers are not subject to the same conflict minerals law and regulations as they are. Many of the minerals are often smuggled out of the country to refiners and smelters, which does not leave any records.

Hewlett-Packard has been trying to identify mineral sources for several years. However, more than half of its 200 suppliers in its conflict minerals report filed last week were listed as ?unknown.?