Elon Musk Suggests Tesla May Eventually Wind Up Mining For Its Own Lithium

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by Tyler Durden
Saturday, Apr 09, 2022 - 08:00 PM

Having already apparently secured his company's nickel needs well in advance of this year's chaos in the nickel markets, Tesla looks to now be focused on securing its lithium needs - by suggesting that it may need to go into lithium mining.

The company's "plans" have only made it as far as an Elon Musk tweet, which admittedly is where many ideas have gone to die off. But the suggestion garnered significant media attention when Musk Tweeted this week:

"Tesla might actually have to get into the mining & refining directly at scale, unless costs improve."

He continued: “Price of lithium has gone to insane levels. There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.”

Musk was responding to a Tweet that showed the skyrocketing price of lithium, from $4,450 in 2012 to $78,032 (per tonne) in 2022. 

As CNBC noted, there are numerous deposits of lithium all over the U.S., citing information from the U.S. Geological Survey, a division of the U.S. Department of Interior.

Lithium is crucial in the EV space because of its use in EV batteries. "batteries made with lithium have a high power-to-weight ratio, which is important when dealing with transportation," CNBC reported

Recall just days ago we wrote how Tesla sidestepped the spike in nickel prices through a "secret deal" with Vale. A multiyear supply deal for nickel has been in place and covers nickel from Canada, we wrote. "Unlike most of its peer automakers, Tesla has spent years focusing on how to secure its own nickel supplies," a report from Bloomberg said last week. 

Gene Munster of Loup Ventures said: “What Tesla has done with nickel is a hidden competitive advantage. Tesla continues to be a couple of steps ahead of the rest.”

And Munster is right, in that Musk has "repeatedly" flagged nickel as a concern for the company amidst broader sector demand that is expected to more than triple by 2030. 

So while many of Musk's "ventures" that have started as Tweets haven't panned out, maybe Tesla will wind up mining lithium after all...