Most probably, the controversial CEO had not thought of Tesla employees taking the pickaxes and digging the lithium themselves. It was rather about securing a steady supply by investing in mining companies or securing contracts. Tesla did that when it partnered with the Brazilian mining company Vale S.A. to supply the nickel needed to build Li-Ion batteries.
Nevertheless, the times have changed and this means Musk’s opinion about taking it all the way to the mine has changed too. In the face of the steep lithium price increases, Elon Musk announced that Tesla “might” get into mining and refining the material. We’re sure he already had something in mind when he wrote the tweet.
“Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale, unless costs improve,” wrote Musk’s tweet. “There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.”
Musk also referred to the evolution of lithium prices, which were at less than $5,000 until 2015. There were moments this year when nickel traded for above $100,000, although it settled lower in the meantime. This means that an average electric vehicle would be about $2,000 more expensive to produce, according to Barron’s. Nevertheless, Tesla has countered this increase by aggressively raising the prices of its vehicles.
It's not the first time that Tesla considers mining lithium directly. During Battery Day in 2020, Musk told shareholders that Tesla acquired the mining rights to 10,000 acres (around 4,000 ha) in Nevada. Musk announced an internally-developed process to produce lithium from clay deposits. But during the economic slowdown in 2020, the plans have been shelved.
Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale, unless costs improve.— Elon Musk (@elonmusk) April 8, 2022
There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.