Tesla intends to enter the lithium mining and refining business, Elon Musk hints.
Elon Musk said that the rapidly rising lithium price is making the EV company think about entering the direct mining and refining market.
Tesla CEO Elon Musk hinted on Saturday on the microblogging site Twitter that the electric vehicle maker may delve into lithium mining and refining directly to decrease the cost of producing EVs. Musk expressed concern about the rising cost of lithium, a critical mineral needed in the manufacture of electric vehicle batteries.
He stated that the price of lithium had reached absurd heights. Musk noted that until costs improve, Tesla may have to enter the mining and refining business directly. The Tesla CEO added that "there is no shortage of the element itself, as lithium is found practically everywhere on Earth." Additionally, Musk stated that the company is working on some innovative solutions for sustainable lithium extraction and refinement.
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Previously, Tesla manufactured its own batteries rather than getting them from suppliers. Now, the American electric vehicle manufacturer intends to expand into the lithium mining and processing sectors as well. This would offer the manufacturer complete control over its whole environment, significantly lowering its reliance on suppliers. Additionally, by entering the lithium mining and refining business directly, Tesla will be able to ramp up production of its EV batteries and vehicles in the future. Additionally, the carmaker will be able to sell its vehicles at a more competitive price due to the lower manufacturing costs.
Lithium is the primary rare earth element that is used in the manufacture of lithium-ion (Li-ion) and lithium-phosphate (LFP) batteries. While the price of lithium was $4,450 per tonne in 2012, it has risen to a stunning $78,032 per tonne ten years later. Interestingly, even last year, the price of lithium was substantially lower. Elon Musk's tweet suggests that lithium will be priced at $17,000 per tonne in 2021. Tesla's entry into the lithium mining and refining sector may serve as a catalyst for other automakers to follow suit. This would erode the sector's hegemony of Chinese and South Korean battery makers.
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