Tesla CEO Elon Musk encouraged entrepreneurs to enter the lithium mining business today. This request came during Tesla’s Q2 2022 earnings call that took place today.
“I’d like to, once again, urge entrepreneurs to enter the lithium refining business.”
He added, “It’s like software margins,” and that “it’s a license to print money.”
Elon Musk also said that Tesla sees constraints in the refining of materials to make the battery cells. He added that there isn’t a shortage of materials on Earth but emphasized the need for more refining.
“There is no fundamental barrier, it’s simply a rate question here.”
Tesla does not want to get into the mining industry.
During my own interview with Elon Musk, he emphasized that he hoped Tesla doesn’t have to get into the mining or refining industry. He also explained that there isn’t a shortage of lithium-which he’s said before many times.
“Well, we don’t want to go into the mining industry or the sort of refining industry because the limitation, I think, is actually more. For example, with lithium, it’s more lithium refinement than it is the actual mining. So you better take the ore that contains lithium, and you’ve got to refine it and get it to battery-grade lithium hydroxide or lithium carbonate. And it has to be extremely pure. Otherwise, you could have a breakdown in the cell.
“You can’t have impurities in the cell because it would cause the cell to fail. So the challenge with a lot of the ingredients into lithium-ion batteries is the processing. It’s not the fundamental rarity of lithium. Lithium is very common. It’s one of the most common elements on earth. But you’ve got to turn it into battery-grade lithium and that’s, that’s where the chokepoint is.”
“So I hope we do not need to get into the mining business. There’s a limited number of smart, hard, working people that we can say, ‘work on this problem or work on that problem.’ So [if] we have people work on this problem, they can’t work on that problem. There’s not like some magical source of super talented people. We’re not sitting around with our resources saying ‘I wonder what more we can take on?’ We focus on things that really make a difference,”
The challenges lie in the refining of lithium and I think this is where entrepreneurs could step in and help.