Tesla CEO Elon Musk said on his personal Twitter account on the 9th that Tesla may directly be involved in lithium mining and refining business on a large scale, because the cost of key energy metals for manufacturing batteries has been too high.
Lithium is a key metal material in the manufacture of batteries, and according to Benchmark Mineral Intelligence, lithium metal prices rose by more than 480% from the same period last year.
The World of Statistics Twitter account shared the price changes of lithium metal in the past 10 years, and the sharp price surge in 2022 far exceeded that of previous years. Musk wrote in a tweet replying to World of Statistics that "the price of lithium metal has reached crazy levels", arguing that lithium itself is not lacking, but the extraction and refining speed is slow.
Musk said that unless the cost is adjusted, Tesla may have to enter the lithium mining and refining business on a large scale.
In fact, this is not the first time Musk has proposed that Tesla wants to invest in mining. People familiar with the matter revealed to Fortune that tesla acquired the right to mine lithium in Nevada in 2020 after failing to acquire a lithium mining company. According to the U.S. Geological Survey, lithium deposits do exist all over the country.
In February, Australian lithium miner Liontown Resources announced that it had signed a five-year contract with Tesla to supply spodumene concentrate, starting in 2024, with 100,000 dry tons in the first year and 150,000 dry tons in the next four years. The soaring price of lithium metal in recent years reflects the strong demand for electric vehicles in the market, and also forces the cost of batteries to rise, and the price of electric vehicles has risen with the water.
Morgan Stanley expects that this will further reduce the profits of car companies and even lead to a collapse in demand. Because lithium batteries are the most expensive components of electric vehicles, analysts estimate that car companies will need to raise the price of electric vehicles by 15% to maintain the cost structure.
Upstream mineral prices have soared, undermining the price trend that experts originally predicted that battery costs would decline year after year, and rising costs may lead to a slowdown in the overall electric vehicle market.
But Morgan Stanley believes Tesla is likely to be hit the least because it is working on new battery technologies to reduce demand for raw materials and, on the other hand, has its own source of lithium ore supply. When all electric vehicles are increasing in price, Tesla, which is not too cheap, is more likely to let people with limited budgets take a look at it and achieve a one-step consumption upgrade.