Tesla seeks “permission to print money” in the US

In the US, Tesla wants to open its own lithium recycling plant. An activity described by Elon Musk as “permission to print money” due to the financial windfall it can bring.

The cost of lithium has risen sharply in recent months, with a 480% increase from January 2021 to January 2022, according to BMI. And when we know that the lithium battery in an electric car sometimes makes up 40% of the total cost of a car (as in the case of the Tesla Model Y), we better understand the reasons why car manufacturers are trying to find solutions to purchase lithium at a good price. In this little game, Tesla could take a step ahead of its competitors.

Lithium plant for Tesla from 2024?

Indeed, according to Reuters, Tesla wants to set up a lithium processing plant in Texas and has filed a formal request with the authorities. It says the company wants to turn raw lithium into a material that can be used to make batteries. The goal is to produce lithium hydroxide, which is needed for the production of battery cells for electric vehicles, in particular for Tesla 4680 batteries.

If this request is successful, Tesla will be able to start the construction site from the fourth quarter of 2022 to start commercial production from the end of 2024, as we can read in the document.

Please note, however, that this plant will not be a mine at all, and thus will not be used for lithium mining. Tesla would then still have to keep getting raw lithium to convert it to get the purity needed to make batteries.

How to print money according to Elon Musk

However, refineries are very important in the field of electric vehicles. Elon Musk did recall a few months ago that an oil refinery is more or less equivalent to a money creation permit. The American billionaire said during a conference call with investors that the margins in this area are very high, similar to what is done in the software industry.

Remember that Tesla would also like to mine lithium. In 2020, an American company announced the acquisition of a 10,000 hectare mine in Nevada. In order to use more “clean” methods for extracting lithium from the bowels. But for now, the project seems to be stalling.

On the way to falling prices for electric vehicles

All these projects are very important for Tesla, as well as for its competitors. In fact, mainly by lowering the cost of batteries, it will be possible to offer more affordable electric vehicles. If Elon Musk promised that the price of Tesla electric cars would go down as inflation fell, other methods would make it happen.

This is especially the case for the 4,680 cells of Tesla’s new batteries, which should lower manufacturing costs for the Model Y, as well as enable mass production of the Tesla Semi truck and the Cybertruck electric pickup truck.

The internalization of lithium mining and processing is also being considered by car manufacturers. Of particular note is the Stellantis (PSA – Fiat) project, which invested 50 million euros in lithium mining company Vulcan Energy.

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