Tesla’s Musk makes plea for more global lithium production

Tesla CEO Elon Musk has described battery production – specifically lithium – as the ‘fundamental limiting factor’ for electric vehicle (EV) adoption worldwide, in a public appeal for greater investment in battery metals mining.

Speaking on an earnings call with investors yesterday, Musk highlighted the growing gap between supply and demand for lithium that’s being fuelled by the higher take-up in EVs, over the last year in particular.

“We think we’re going to need to help the industry on this front,” Musk said. “I’d certainly encourage entrepreneurs out there who are looking for opportunities to get into the lithium business. Lithium margins right now are practically software margins.”

An index compiled by Benchmark Mineral Intelligence showed that lithium prices surged 280% in 2021 and another 127% in the first quarter of 2022.

These remarkable price explosions have increased raw material costs for carmakers such as Tesla, although the technology giant reported a record first quarter profit yesterday, helped in part by rising prices.

Musk’s latest comments have spawned further speculation about Tesla potentially making an acquisition in the US lithium mining arena. The company is building a processing plant in Texas that will convert spodumene concentrate into a battery-ready lithium hydroxide product.