Wall Street is aghast at Elon Musk’s dismissive attitude toward analysts’ probing following a quarter of record (but less than expected) losses for Tesla, but the electric vehicle maker did provide some answers to questions that’s been vexing the mining industry.

Benchmark Mineral Intelligence, a provider of price information and research on battery supply chains, parsed the numbers after Tesla gave a rare indication of the relative proportions of raw materials used in its latest lithium-ion battery for its Model 3.

At first blush it’s not good news for miners of cobalt, a crucial ingredient in batteries used in electric vehicles and cellphones that's been trading near decade highs above $90,000 a tonne.

Since their inception, cathode and battery manufacturers have been working on reducing their cobalt dependency as this is the most expensive raw material input.

With NCM, a number of formulations have been developed over the last 25 years, each with a lower cobalt intensity usage than the next.

The original NCM111 material has evolved into NCM523 (5 parts nickel, 2 cobalt and 3 manganese) and more recently, NCM622 (6 parts nickel, 2 cobalt and 3 manganese).

The end game with this chemistry is to develop NCM811, to which Elon Musk’s refers to. However, this is still a number of years away from widespread commercial adoption due to lifecycle and safety concerns but will offer a lower raw material costs and improved energy density.

Another significant difference between Tesla and other automakers has been its use of induction motors in its Roadster and S models, which unlike permanent magnet traction motors features no rare earths elements.

Car manufacturers are keen to reduce reliance on rare earths, which like cobalt, suffers from highly concentrated supply and unpredictable pricing, with China holding a virtual global monopoly in primary supply and processing.

But with the Model 3, which Tesla hopes would turn it into a mass-market success and not just a niche luxury car manufacturer, the company has ditched induction motors.

In a recent interview with Electrek, Tesla’s principal motor designer justified the switch as a “tradeoff between motor cost, range, and battery cost” and explained that “the permanent magnet machine better solved [Tesla’s] cost minimization function, and it was optimal for the range and performance target”.

It can be observed that the direct bill of materials for a PM traction motor is approximately 15% higher than that of a comparable induction motor – primarily because of NdFeB magnet costs – a fact that proponents of induction motors often cite as the architecture’s main advantage.

What this argument ignores however is that induction motors are upwards of 15% less efficient than PM traction motors, especially at low speeds, thus an automaker using an induction motor may need to compensate with a larger (and costlier) battery pack so as to offer a competitive driving range (mileage per charge).

The cost of increasing the capacity of a 60-kWh battery pack by just 5% to compensate for use of an induction motor can increase powertrain costs by upwards of $300 (optimistically assuming an added cost of just $100/kWh), suggesting that use of a PM traction motor is substantially more economically attractive despite higher direct material costs.