Elon Musk noted the demand for lithium and other battery materials around the world in a special message for people listening to Tesla’s Q2 earnings call last month. Musk claims that lithium refining is more difficult, which makes it a suitable market in which to make some money, even though lithium mining is something that many companies can accomplish and is essential to the expansion of the electric vehicle sector.
During Tesla’s second-quarter earnings call last month, Musk urged business owners to start doing lithium refining in light of the expanding EV industry and higher-than-ever battery demand, according to Bloomberg . The announcement coincides with lithium prices that are on the rise due to a bottleneck caused by the small number of worldwide businesses that can produce chemicals with lithium carbonate and hydroxide of battery-grade quality.
When discussing the value of lithium processing, Musk pointed out that there are software-like margins to be realized and said that the activity is essentially like “mining money.”
I want to encourage business owners to start a lithium refining company once more. According to Musk on the earnings call, mining is quite simple, but refining is significantly more difficult. You cannot lose since it is a permit to print money.
Prices for lithium carbonate have risen by over 450% in China, the largest auto market in the world and a crucial market for Tesla. Furthermore, China currently controls more than half of the world’s capacity for lithium refining, though Chile, Australia, and Argentina have started expanding their own refining capacities.
Tesla sought for a permission to begin construction of an EV battery cathode facility earlier this year, and Musk has even mentioned the possibility of the company refining its own lithium if costs stay this high. Even if Tesla begins processing lithium on its own, it will probably still require a few additional suppliers, particularly until the global lithium refining sector expands.
As more cars become electric, lithium mining will prosper. Reuters/YouTube video
Despite the lucrative commercial potential in lithium refining, Musk nevertheless advises business owners to avoid thinking that the vast industry will be simple to enter into. Its rarity in the market is probably a result of this difficulty.
According to Musk, the process of refining lithium is challenging, expensive, and difficult to scale.
Musk’s claims, however, are following in the same paths that Tesla has already traveled, so if there isn’t a path in front of you, create one on your own, much like many of the automaker’s successes.
If our vendors fail to address these issues, we will.
EVANNEX was the original publisher. Author: Peter McGuthrie
Officials from Tesla doing risk analyses at a mining site are shown in the featured image. Picture provided by Tesla .
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