Elain Brown Tech 04.09.2022 00:Apr AM EDT

Elon Musk Hints at Lithium Mining as Part of Tesla's Future

Elon Musk hints that he is getting serious again about getting into lithium mining for Tesla. The electric vehicle CEO hinted at this consideration himself through Twitter.

Elon Musk on Lithium Mining for Tesla

Tesla CEO Elon Musk said recently that the company may get into the lithium mining and refining business on its own and on a large scale because the price of the metal, which is used to make batteries, has gone up.

As reported by CNBC, Musk replied in a tweet by the World of Statistics (@stats_feed), showing the price of lithium increasing throughout the decade. As seen in the statistics, the price of lithium in 2012 was $4,450. It doubled its price after five years in 2016, becoming $8,840.

However, the average price of lithium this year is reported to be at $78,032, a previous jump from the 2021 price of $17,000 and the 2020 price of $6,800.

Musk responded to the tweet above, replying: "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."

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

The chart showed the average price of lithium per tonne over the previous years, with an extremely noticeable price increase from 2021. According to Benchmark Mineral Intelligence, the increase is approximately 480% and has been added to the price of the metal in the last year alone.

According to the United States Geological Survey, a division of the United States Department of Interior, the element is not scarce since there are lithium deposits all over the United States of America.

In electric vehicle batteries, lithium is particularly advantageous because it is both the lightest metal and the least dense solid element, making it particularly useful. That is to say, lithium-ion batteries have a high power-to-weight ratio, which is important when dealing with transportation applications.

Elon Musk on Tesla Lithium Clay

Musk has previously expressed interest in the possibility of Tesla mining its own lithium. According to Fortune, Tesla was able to get its own rights to mine lithium in Nevada even though it had planned to buy a company there in 2020.

It was reported that Tesla had discussions with Cypress Development Corp., which is looking to extract lithium from clay deposits in southwest Nevada. However, both parties were unable to come to an agreement.

Tesla plans to extract lithium from clay. As stated by Cypress CEO Bill Willoughby, "This move by Tesla supports the importance of clay as a future source of lithium in the United States."

The supposedly deal with Cypress Development Corp. a few years back was due to Tesla's plan to cut the cost of their battery by 50%. It looks like the increasing price of lithium has been taken into consideration by Musk even before he replied to the tweet above.

Due to the sheer growing demand for electric vehicles, the automaker has decided to manufacture its own battery cells as well as battery cathodes and associated raw materials. This decision will allow the company to supplement its existing capacity by partnering with external suppliers.