Elon Musk tweeted that Tesla might enter the lithium mining and refining business directly and on a large scale. The reason is the cost of metal, a key component in the manufacture of batteries is now very high.
“The price of lithium has reached insane levels,” he wrote. According to Elon Musk, lithium is plentiful. “Because lithium is almost everywhere on Earth, but the speed of its extraction or purification is slow.” added Musk.
Elon Musk was responding to a tweet showing the average price of lithium per tonne over the past two decades, indicating a high price increase since 2021. According to Benchmark Mineral Intelligence, the cost of the metal has risen more than 480% in the past year.
Based on the United States Geological Survey (US) conducted a division of the US Department of the Interior, explains that there are indeed lithium deposits throughout the US.
Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale, unless costs improve.
There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.
— Elon Musk (@elonmusk) April 8, 2022
Lithium is important raw material for electric vehicle batteries because it is both the lightest metal and the least dense solid element.
Electric vehicle Batteries made with lithium have a high power-to-weight ratio, which is important when dealing with transportation.
Musk has previously outlined Tesla’s plans to mine and refine lithium himself.
Tesla in 2020 obtained the rights to mine lithium in Nevada, USA. The mining rights were obtained after the agreement to purchase a lithium mining company failed.