And assuming Tesla has a squezze on Li supplies, laws prevent the use of that control to hurt competitors. Braking these laws carries enough fines in all major markets that they will be adhered to.
My understanding is that Tesla is leveraging long-term contractual lock-ins in various shapes. One particular one I heard was that in exchange for fronting some of the up-front cost for the mine Tesla would retain the right to buy X% of the mine's output at a maximum markup of Y% over cost to produce.
This kind of contractual lock-in can achieve the desired goal without using either of the mechanisms you listed.
They're usually used by mining companies to hedge future market variance, and are not exclusive to Tesla either. On top of other companies having these contracts in place as well, mining companies will pay to break these contracts if a high enough bidder comes along or flat out pays them to break it.
With demand pricing spiking for batteries, these lock ins are not very strong.
Agreed.
> On top of other companies having these contracts in place as well
Yes, but scale is important. My analysis at the time was that Tesla was locking in significantly more material behind contracts than Toyota or other companies.
> mining companies will pay to break these contracts if a high enough bidder comes along or flat out pays them to break it.
This assumes the contract is written in such a way that Tesla does not have to consent to the contract being broken. My understanding was that Tesla was trying to get into as many contracts as they could without such clauses.
Source: More compliance trainings I can count and enough real life experience with monopolistic raw material suppliers to know that abusing market position to hirt competitors is a really bad idea.