Commodity in demand: ‘Like printing money’: Tesla boss Elon Musk recommends entry into lithium industry

• Important lithium for electric car batteries
• Rising demand for lithium pushes prices up
• Elon Musk advises founders to get started and thinks about it with Tesla himself

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Lithium is of enormous importance in the energy transition, because it is used in large quantities in the batteries of electric cars: according to “Der Aktionär”, it takes between three and ten kilos of lithium to produce a single electric car. The global market for lithium-ion batteries is expected to grow by 30% per year until 2030 due to the expected increasing diffusion of electric cars, the magazine cites a study by the consulting firm Roland Berger. But while lithium deposits can be found all over the world, supply may not be able to keep up with demand. According to the DIW, producers can only react to the increase in demand to a limited extent in the short term by making greater use of existing capacities. For a larger increase in lithium supply, a delay of several years is necessary, according to the institute. The DIW therefore expects significant price increases for the raw material in the coming years.

Musk: the price of lithium at an “insane level”

The price of lithium has already reached a new high. As indicated by “World of Statistics” on Twitter, the price of a tonne of lithium has risen over the past ten years from 4,450 US dollars in 2012 to 78,032 US dollars in 2022. This immense price surge does not leave the boss of electric. car manufacturer Tesla in the cold, because lithium is currently essential to Tesla for the mass production of its batteries for electric cars. “The price of lithium has reached insane levels,” Elon Musk tweeted in response to the figures from World of Statistics.

As the Tesla boss goes on to explain, the element itself is not lacking, only the mining and processing speed is too slow. Tesla itself could therefore be forced to enter the industry on a larger scale if costs do not improve. Tesla had already secured the lithium mining rights in Nevada in late 2020, but there hasn’t been any new information on that since then, so it’s safe to assume the electric car maker hasn’t mined there yet. of lithium.

Musk encourages founders to enter the lithium industry

In fact, the rising price of lithium is likely to be a cost driver for the group’s electric cars – Tesla has raised the prices of its vehicles several times in the recent past – and could pose a long-term threat to businesses. However, a growing supply could improve the situation – which is probably one of the reasons why Elon Musk asked potential founders to take a closer look at the lithium industry. “Step into the lithium industry, there are profit margins of up to ninety percent, like in the software industry, it’s like printing money,” the boss said. of Tesla, according to “WirtschaftsWoche” as part of the latest balance sheet presentation. “We think we need to help the industry on this front,” Musk continued, according to “ZDNet” — and apparently that help can’t be big enough for him. However, it remains to be seen how long profit margins will remain so high if many founders follow the Tesla boss’ call.

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