Because the cost of lithium, a vital component in battery manufacturing, has gotten so high, Elon Musk stated that Tesla may enter into the mining and refining business directly and at scale.
“Price of lithium has gone to insane levels,” Musk posted a tweet. “There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.”
The Tesla and SpaceX CEO was replying to a tweet that showed the average price of lithium per tonne over the last two decades, with costs skyrocketing after 2021. The price of the metal has increased by more than 480 percent in the last year, according to Benchmark Mineral Intelligence.
🔋 Lithium price ($/tonne):
2022: $78,032
2021: $17,000
2020: $6,800
2019: $11,310
2018: $14,660
2017: $12,070
2016: $8,840
2015: $5,110
2014: $4,680
2013: $4,750
2012: $4,450— World of Statistics (@stats_feed) April 8, 2022
According to the United States Geological Survey, a division of the United States Department of Interior, lithium deposits can be found all throughout the country.
Lithium is the lightest metal and the least dense solid element, making it ideal for electric car batteries. That implies lithium batteries offer a high power-to-weight ratio, which is significant in the transportation industry.
Musk has mentioned the possibility of Tesla mining its own lithium before, including in a tweet on Friday. According to Fortune, which cited “people familiar with the subject,” Tesla won its own rights to mine lithium in Nevada in 2020 after a deal to buy a lithium mining business fell through.
There have been advancements in sodium-ion batteries that provide a tenfold increase in capacity, as well as others that may speed up the demand for more solar electricity. However, nothing has yet been able to completely replace lithium-ion batteries.
This isn’t the first time Musk has contemplated producing Tesla’s own lithium. Tesla got its own rights to mine lithium in Nevada after a proposal to buy a lithium mining business called Cypress Development Corp. fell through in 2020, according to Fortune, citing “people familiar with the issue.”
Last month, Tesla had to raise its costs, with the Model 3, the company’s cheapest car, now costing more than $46,000. During that time, Musk tweeted, “Tesla and SpaceX are feeling considerable recent inflation pressure in raw materials and logistics.”
Due to worldwide chip shortages and rising material prices as a result of the Ukraine conflict, the decision was made. The question now is whether Musk will benefit from starting his own lithium mining company or whether he will have to invest more than he earns.
