In the US, Tesla wants to open its own lithium smelter. The activity, described by Elon Musk as “permission to print money,” owes much to the financial windfall it can bring.
In recent months, the cost of lithium has skyrocketed. BMIAnd when we learn that lithium batteries in electric cars can make up 40% of the total car price (as in the case of the Tesla Model Y), it makes more sense why automakers are looking to find a solution. Very understandable. Get lithium at an affordable price. This little game has allowed Tesla to stay ahead of its competitors.
Tesla’s lithium smelter from 2024?
Indeed, as reported Reuters, Tesla wants to set up a lithium refinery plant in Texas and has submitted a formal request to authorities. The company says it wants to convert raw lithium into a material that can be used to make batteries. The purpose is to produce the lithium hydroxide needed to manufacture battery cells for electric vehicles, specifically Tesla’s 4680 cell.
If this request is successful, Tesla will be able to ramp up construction sites from the fourth quarter of 2022 and start commercial production from the end of 2024, documents read.
Note, however, that this plant is not a mine, so it is not used for lithium extraction. Tesla must continue to obtain raw lithium in order to convert it to obtain the purity required to manufacture its batteries.
According to Elon Musk, what prints money
Nevertheless, refineries are very important in the field of electric vehicles. Elon Musk actually recalled a few months ago that refineries were more or less equivalent to money-making powers. The American billionaire revealed on a conference call with investors: Profit margins in this area were very highsimilar to what is done in the software industry.
Recall that Tesla also wants to get into the lithium extraction business. The American company announced that in 2020 he purchased a 10,000-hectare mine in Nevada. With the ambition to use more “cleaner” methods to extract lithium from subsoil. However, at the moment, the project seems to have stalled.
Toward lowering the price of electric vehicles
All of these projects are very important to Tesla, but they are also important to its competitors. In fact, the ability to offer more affordable electric vehicles is largely due to success in lowering the cost of batteries. If Elon Musk promises that the price of Tesla’s electric cars will fall as inflation falls, there are other ways to achieve this.
This is especially true with the 4680 cells in the new Tesla battery. This will reduce manufacturing costs for the Model Y while allowing mass production of Tesla Semi Truck and Cybertruck electric pickups.
Internalization of lithium extraction and purification is also an option that automakers are considering. We can especially mention his Stellantis project (PSA – Fiat), in which he invested his €50 million in Vulcan Energy for the extraction of lithium.
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