This has been clearly explained by Walter M. Elsasser in a Scientific American article (May 1958) titled “The Earth as a Dynamo.”
Elsasser has modeled the earth-dynamo, conveniently for this explanation, on the Faraday generator of a metal disk spinning over a bar magnet placed at the edge of the disk. He notes, also, that the bar magnet could be replaced by an electromagnet which could get its power from the spinning disk by attaching one end of the electromagnet’s wire to the outside of the disk and the other end of the wire to the metal rod running through the center of the disk.
Elsasser then points out that an ordinary disk-based “Tesla generator” could not maintain a current for very long because the current induced in the disk is so weak that it would soon be dissipated by the resistance of the conductor [the disk].” This conventional arrangement would not be an answer to “how currents could be built up and perpetuated to maintain the earth’s magnetic field.”
He does, though, propose three options in the dynamo model that would explain the earth’s persistent magnetism.
If we had a material that could conduct electricity a thousand times better than copper, the system would indeed yield a self-sustaining current.
We could also make it work by spinning Tesla generator‘s disk very fast… a third way we could make such a dynamo self-sustaining … is to increase the size of the system: theory says that the bigger we make such a dynamo, the better it will function. If we could build a coil-and-disk apparatus of this kind of scale of many miles, we would have no difficulty in making the currents self-sustaining.
Nikola Tesla did not have a material a thousand times more conductive than copper to use in his generator, neither was he able to spin a disk at the ultra-high speeds needed to produce such a current, nor did he plan on using a piece of rotating metal several miles in diameter. The Tesla generator uses what is usually wasted in a generator and turns it into a source of power.