{"id":866132,"date":"2026-07-14T17:00:00","date_gmt":"2026-07-14T15:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=866132"},"modified":"2026-07-14T15:59:10","modified_gmt":"2026-07-14T13:59:10","slug":"elon-musks-r25-trillion-giant-depends-on-a-tiny-south-african-town-in-the-middle-of-nowhere","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/866132\/elon-musks-r25-trillion-giant-depends-on-a-tiny-south-african-town-in-the-middle-of-nowhere\/","title":{"rendered":"Elon Musk\u2019s R25 trillion giant depends on a tiny South African town in the middle of nowhere"},"content":{"rendered":"\n

Elon Musk’s Tesla and its flagship electric vehicles rely heavily on the tiny South African town of Hotazel in the Northern Cape. <\/p>\n\n\n\n

Hotazel has roughly 4,000 residents and sits at the centre of the Kalahari Manganese Field, one of the world’s richest sources of manganese.<\/p>\n\n\n\n

Although few people outside the mining industry have heard of the town, its mineral wealth plays an important role in producing the steel and batteries used in Tesla\u2019s electric vehicles.<\/p>\n\n\n\n

Tesla, founded in 2003 and led by CEO Elon Musk, has grown into the world’s most valuable automaker, with a market capitalisation of roughly R25 trillion.<\/p>\n\n\n\n

While the company is increasingly investing in artificial intelligence, autonomous driving, robotics and energy storage, most of its revenue still comes from manufacturing and selling electric vehicles.<\/p>\n\n\n\n

Tesla produces millions of vehicles each year, which requires massive quantities of raw materials. This includes manganese, a metal that is vital to both vehicle construction and battery technology.<\/p>\n\n\n\n

Hotazel lies about 150 kilometres north of Postmasburg in the arid Kalahari region of the Northern Cape.<\/p>\n\n\n\n

The town, whose name is said to be a play on the phrase “hot as hell” because of the area’s extreme temperatures, was established to serve the surrounding manganese mines.<\/p>\n\n\n\n

Hotazel is situated on the Kalahari Manganese Field, which the US Geological Survey and the mining industry estimate contains between 70% and 80% of the world’s known land-based manganese reserves<\/strong>.<\/p>\n\n\n\n

South Africa exports much of its raw manganese to China, where it is processed into steel and other industrial products. More than 60% of the country’s manganese is exported to Chinese smelters.<\/p>\n\n\n\n

This supply chain is significant to Tesla because much of the processed steel is used in vehicle manufacturing at the company’s Shanghai Gigafactory, which produces more than half of all Tesla vehicles sold globally.<\/p>\n\n\n\n

Tesla does not own or deal directly with the mines or towns in South Africa, but it remains dependent on manganese extracted from the Kalahari Manganese Field through its network of suppliers and battery manufacturers.<\/p>\n\n\n\n

The importance of Hotazel for Tesla <\/h2>\n\n\n\n
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Manganese has become an increasingly important ingredient in modern electric vehicle batteries because it improves durability, safety and energy density while reducing reliance on more expensive materials such as nickel and cobalt.<\/p>\n\n\n\n

Tesla’s long-range and performance models use nickel-manganese-cobalt battery chemistry, where manganese helps stabilise battery cells and reduces the risk of overheating.<\/p>\n\n\n\n

The models that rely on this include Tesla\u2019s Model 3, Model Y, Model S, Model X, and Cybertruck. <\/p>\n\n\n\n

The company has also been moving toward lithium-manganese-iron-phosphate batteries for some standard-range vehicles, with manganese boosting energy density while keeping costs down.<\/p>\n\n\n\n

Musk has stressed that manganese is a key material needed to make electric vehicles cheaper as production increases around the world. He also noted that the company expects demand for this metal to continue to grow.<\/p>\n\n\n\n

If Hotazel and its surrounding manganese mines in the Northern Cape were to completely shut down, Tesla would face significant supply-chain challenges. <\/p>\n\n\n\n

Replacing the volume from the region would force Tesla’s global supply team to source from alternative markets or deposits (such as those in Australia or Gabon), which would likely drive up raw material and battery prices.<\/p>\n\n\n\n

To address the sudden shortage, Tesla’s battery engineers would need to temporarily adjust the cathode material mix to use more nickel or lithium. This change could impact the performance, range, and costs of vehicles like the Model Y and Model 3.<\/p>\n\n\n\n

Although Hotazel is geographically remote, the mining activity surrounding the town makes it economically significant.<\/p>\n\n\n\n

The town is part of the Joe Morolong Local Municipality, which has just 2,312 registered taxpayers, according to the latest South African Revenue Service tax statistics.<\/p>\n\n\n\n

Those taxpayers earn an average taxable income of about R400,705 a year, or roughly R33,392 a month.<\/p>\n\n\n\n

This is notably higher than the Northern Cape average of approximately R307,687, or about R25,640 per month. The higher incomes largely reflect the concentration of skilled mining jobs in the area.<\/p>\n\n\n\n

Because the bulk of non-taxpayers drop out of SARS’s personal income tax calculation, the remaining pool is disproportionately made up of highly skilled, formal mining personnel and senior municipal officials.<\/p>\n\n\n\n

Modern manganese and iron-ore extraction requires specialised engineers, metallurgists, heavy-equipment mechanics, safety managers, and contractors.<\/p>\n\n\n\n

These highly skilled individuals make up a large portion of those living in and around Hotazel and other small mining towns in the municipality. <\/p>\n\n\n\n

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Photos of Hotazel and manganese mines in and around the town <\/h2>\n\n\n\n
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Elon Musk’s Tesla and its flagship electric vehicles rely heavily on a tiny South African town in the Northern Cape.\u00a0<\/p>\n","protected":false},"author":92,"featured_media":866152,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2077045724328390878","_sma_x_attempts":1,"footnotes":""},"categories":[9872],"tags":[25814,21998,853,25813],"class_list":["post-866132","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-hotazel","tag-northern-cape","tag-south-africa","tag-telsa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/866132","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=866132"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/866132\/revisions"}],"predecessor-version":[{"id":866308,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/866132\/revisions\/866308"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/866152"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=866132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=866132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=866132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}