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Tesla May Start Mining Lithium as Musk Cites Battery Metal Cost

Commodities Apr 08, 2022 04:45PM ET
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© 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.

Tesla May Start Mining Lithium as Musk Cites Battery Metal Cost
 

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Comments (4)
Bev Mcguffee
Bev Mcguffee Apr 09, 2022 12:07AM ET
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One thing I can say for Musk-he puts actions behind his words!
Trevor Roberts
LimitUp Apr 08, 2022 8:50PM ET
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Musk can do it all, he is a God send for the US. Legend
Karam Rajeh
Karam Rajeh Apr 08, 2022 8:34PM ET
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If you buy a $50k electric vehicle to save $80 a month on gas you’ll need 52 years to break even.
Volvo Lovers
Volvo Lovers Apr 08, 2022 8:34PM ET
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But walk around your city everyday, with lots of engines on and you’ll die well before the 52 years have passed. Chose
Karam Rajeh
Karam Rajeh Apr 08, 2022 8:34PM ET
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We already that much cars roaming and you would have been dead by now. That is why we grow trees
John Laurens
John Laurens Apr 08, 2022 6:42PM ET
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Miners get greedy.. miners lose their contracts.. hmm
 
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