Elon Musk, the CEO of both Tesla and SpaceX, said in a tweet that his automotive company might mine and refine lithium due to the element’s rising cost. Lithium is used to produce lithium-ion batteries, which are still the standard for rechargeable batteries in various consumer technologies, even though there are significant drawbacks to lithium-ion batteries. Such as the dangers of battery degradation, which can cause batteries to lose capacity and potentially combust. Lithium-ion batteries are present in everything from cell phones to electric vehicles. Musk suggests that Tesla consider becoming more involved in the mining and refining industry to combat inflation and increased costs.
Due to various factors impacting the global supply chain, such as the COVID-19 pandemic and the Russo-Ukrainian conflict, critical components have been unavailable. This has caused prices to rise across the technological and automotive industries for both producers and consumers. Tesla has not been immune to these factors — twice in a single month, it raised its electric vehicle prices by as much as $10,000. In a tweet, Musk provided a report by the Financial Times and confirmed that both SpaceX and Tesla have seen “significant recent inflation pressure in raw materials and logistics.” Now, the situation is dire enough that the CEO is publicly considering a deeper involvement in some areas of Tesla’s supply chain.
Musk’s Twitter exchange began after an account called World of Statistics noted the sharp increase in lithium prices over the past decade. In 2012, the price of lithium per metric ton — which is equivalent to roughly 2,200 pounds — was 4,450 U.S. dollars. In 2022, the cost for the same amount of the element has risen to an outstanding 78,032 U.S. dollars. Since lithium is vital to producing the large batteries that make electric vehicles a viable alternative to traditional combustion-engine cars, the increase has subsequently affected the sticker price of Tesla’s offerings.
Will Tesla Enter The Lithium Mining Industry?
In response to the initial tweet, Musk implied that he would consider mining lithium to directly source the materials needed to produce Tesla vehicles. “Price of lithium has gone to insane levels,” Musk agreed in a tweet. “Tesla might actually have to get into the mining & refining directly at scale, unless costs improve.” However, it is essential to note that Musk often freely speaks his mind on Twitter, and his thoughts do not always make their way into his spheres of influence. Though Musk has the power to impact many corporations, his suggestion that Tesla could enter the mining and refining industry is far from a bonafide confirmation or official announcement.
Musk’s displeasure with lithium’s rising prices is due to the element’s abundance on Earth. As opposed to other elements that are in limited supply on the planet, there is enough lithium to support the technological and automotive industries for the foreseeable future. “There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow,” Musk continued. According to peer-reviewed studies, his claim is correct — lithium is the 33rd-most abundant element and is present on the Earth’s surface, rocks, soil, ground and sea waters. That means regardless of whether Musk will direct Tesla to obtain lithium, there is a strong argument for the company to become more involved in the process due to the element’s role in the production of electric vehicles.
