Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Tesla May Start Mining Lithium as Musk Cites Battery Metal Cost

Published 04/08/2022, 04:21 PM
Updated 04/08/2022, 04:45 PM
© Bloomberg. Lithium chloride powder is weighed in the Vulcan Energy Resources Ltd. laboratory at the ZEISS Innovation Hub in Karlsruhe, Germany, on Thursday, Oct. 21, 2021. A new mining process aims to produce battery-grade lithium in Germany without hurting the environment.

(Bloomberg) -- Nearly two years after Tesla (NASDAQ:TSLA) Inc. outlined a plan to dig for lithium, its chief Elon Musk signaled that the electric car giant might start doing so, due to skyrocketing cost of the metal key to battery technology.

Lithium has joined the turmoil gripping commodities in the wake of Russia’s war on Ukraine. Even before the war, prices of raw materials rallied with demand surging and supplies choked up due to pandemic-triggered supply chain woes. An index of global lithium prices compiled by Benchmark Mineral Intelligence has surged almost 490% in the past year. China worries about prices of lithium so much that it hauled in a range of market players for two days of talks focused on halting a breakneck run-up in prices.

Lithium is a key component in electric vehicle batteries and so automakers are racing to secure supplies, expecting surge in demand amid a global push for the electrification of transportation. Tesla has signed supply deals with producers of battery metals in the past couple of years, including a secret one with mining giant Vale SA (NYSE:VALE).

In the wake of the price rally in lithium, China is already telling its EV battery supply chain that it wants lithium prices to return to sustainable levels as soaring prices have increased cost inflation for manufacturers and threatened to eventually hurt consumer demand.

Read: Tesla Dodges Nickel Crisis With Secret Deal to Get Supplies

©2022 Bloomberg L.P.

© Bloomberg. Lithium chloride powder is weighed in the Vulcan Energy Resources Ltd. laboratory at the ZEISS Innovation Hub in Karlsruhe, Germany, on Thursday, Oct. 21, 2021. A new mining process aims to produce battery-grade lithium in Germany without hurting the environment.

Latest comments

One thing I can say for Musk-he puts actions behind his words!
Musk can do it all, he is a God send for the US. Legend
If you buy a $50k electric vehicle to save $80 a month on gas you’ll need 52 years to break even.
But walk around your city everyday, with lots of engines on and you’ll die well before the 52 years have passed. Chose
We already that much cars roaming and you would have been dead by now. That is why we grow trees
Miners get greedy.. miners lose their contracts.. hmm
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.